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Three put options on a stock have the same expiration date and strike prices of $50, $60, and $72. The market prices are $2, $8,
Three put options on a stock have the same expiration date and strike prices of $50, $60, and $72. The market prices are $2, $8, and $18, respectively. Explain how a long position in a butterfly spread can be created. Construct a table showing the profit from the strategy. For what range of stock prices would the butterfly spread lead to a loss?
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