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The premiums for the call and put options with 1 - year to expiration for a stock are given below. The effective annual interest rate
The premiums for the call and put options with year to expiration for a stock are
given below.
The effective annual interest rate is Construct an asymmetric butterfly spread position with three strike prices and by using calls.
a Determine how many calls that you need to sell and buy respectively for the asymmetric butterfly spread position. Calculate the profit of the asymmetric butterfly spread position.
b When ST what the profit is Draw the graph of the profit.
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