The following prices are available for call and put options on a stock priced at $50. Calls Puts Strike March June March June 45 6.84 8.41 1.18 2.09 50 3.82 5.58 3.08 4.13 55 1.89 3.54 6.08 6.93 Assume that each transaction consists of one contract (for 100 shares). Consider executing a butterfly spread using the June Calls. What will be the cost of the butterfly spread? A. $79 B. $1,195 C. $1,045 D. $637

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The following prices are available for call and put options on a stock priced at $50. Calls Puts Strike March June
March June 45 6.84 8.41 1.18 2.09 50 3.82 5.58 3.08 4.13 55 1.89 3.54 6.08 6.93 Assume that each transaction
consists of one contract (for 100 shares). Consider executing a butterfly spread using the June Calls. What will be
the cost of the butterfly spread? A. $79 B. $1,195 C. $1,045 D. $637
Transcribed Image Text:The following prices are available for call and put options on a stock priced at $50. Calls Puts Strike March June March June 45 6.84 8.41 1.18 2.09 50 3.82 5.58 3.08 4.13 55 1.89 3.54 6.08 6.93 Assume that each transaction consists of one contract (for 100 shares). Consider executing a butterfly spread using the June Calls. What will be the cost of the butterfly spread? A. $79 B. $1,195 C. $1,045 D. $637
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