Three put options on a stock currently selling for $50 have the same expiration date and strike prices of $45, $50, and $55. The market prices are $4, $6, and $10 respectively.

Explain how a butterfly spread can be created from these three options.

Construct a table showing the payoff and profit from this strategy for different values of ST.

Sketch the profit as a function of ST.

For what values of ST does the butterfly spread result in a loss?