Suppose the prices of 3-month European call options with strike prices of $40, $45 and $50 are $6.08, $2.70, and $0.86, respectively.

a) Explain how a trader can create a butterfly spread using these options.

b) What is the profit when the price of the underlying asset in three months is $40

c) What is the profit when the price of the underlying asset in three months is $43

d) What is the profit when the price of the underlying asset in three months is $49

e) For what range of prices of the underlying asset does a trader make a profit?