Price of the stock at expiration

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A stock is currently trading at a price of $114. You construct a butterfly spread using calls of three different strike prices on the stock, with the calls expiring at the same time. You go long one call with an exercise price of $110 and selling at $8, go short two calls with an exercise price of $115 and selling at $5, and go long one call with an exercise price of $120 and selling at $3.

-Determine the profit at expiration from your strategy when the price of the stock at expiration is:

-$106

-$110

-$115

-$120

-$123

-Determine the following:

-The maximum possible loss on the position at expiration.

-The maximum profit on the position at expiration.

Reference no: EM133111772

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