What must this investor believe about the stock price

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Reference no: EM131983299

1-year European call options with strike prices of $50, $55, and $60 cost $7, $4, and $2, respectively. You construct a butterfly spread by buying one $50-strike call, writing two $55-strike calls and buying one $60 - strike call. (assume that the 1-year interest rate in 2%)

Create the table and profit graph for this position.

What is the maximum loss for this position?

What is the maximum profit for this position?

What are the breakeven points for this position?

What must this investor believe about the stock price in order to justify this position?

Reference no: EM131983299

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