What is the maximum profit on this set of transactions

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Reference no: EM132018233

A trader purchases an asymmetric butterfly spread by purchasing 1 call with a strike price of $20, another call with a strike of $30, and selling short two calls at a strike of $27. The premiums are 8, 4, and 1, respectively.

A. What is the maximum profit on this set of transactions?

B. If at expiration the spot price is $29, what is the net profit (ignoring TVM)?

C. What is the lowest spot price at expiration that would still allow the trader to break even?

(SHOW STEP BY STEP PROCESS. NO EXCEL WORK PLEASE)

Reference no: EM132018233

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