Question 2 (25 marks) You have been approached by a client who would like to conduct a trade on Capital & Counties Properties PLC shares which are trade on the Johannesburg Stock Exchange and currently trading at R72.59. The client believes that even thought the share has been volatile, it will move in a very narrow range over the next 3 months. He has asked you to prepare a butterfly spread that uses call options. The basic trade is as follows: 1) Buy an in-the-money call option 2) Write 2 at-the-money call options 3) Buy an out-the-money call option Using the information provided in the table below, draw a butterfly spread (using excel, the template provided or MS paint) and label all relevant points on the graph. Instrument Call 1 Call 2 Call 3 Exercise_Price 66 75 84 Premium 8.32 2.47 0.38 Question 2 (25 marks) You have been approached by a client who would like to conduct a trade on Capital & Counties Properties PLC shares which are trade on the Johannesburg Stock Exchange and currently trading at R72.59. The client believes that even thought the share has been volatile, it will move in a very narrow range over the next 3 months. He has asked you to prepare a butterfly spread that uses call options. The basic trade is as follows: 1) Buy an in-the-money call option 2) Write 2 at-the-money call options 3) Buy an out-the-money call option Using the information provided in the table below, draw a butterfly spread (using excel, the template provided or MS paint) and label all relevant points on the graph. Instrument Call 1 Call 2 Call 3 Exercise_Price 66 75 84 Premium 8.32 2.47 0.38