Three-month european put options with strike prices of 50


Three-month European put options with strike prices of $50, $55, and $60 cost $2, $4, and $7, respectively. What is the maximum gain when a butterfly spread is created from the put options? What is the maximum loss when a butterfly spread is created from the put options? For what two values of the stock price in three months does the holder of the butterfly spread breakeven with a profit of zero?

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Financial Management: Three-month european put options with strike prices of 50
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