The one with the highest MAXIMUM payoff, regardless of probability is the[long/short], [call/put] butterfly, with the payoff of [amount]. (Round dollar answer to the nearest dollar).

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
Section: Chapter Questions
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17. You are considering a butterfly spread for ZEUS (Olympic Steel) currently trading for
$17.67 per share ask. You study these quotes:
Call-Bid
.75
.10
.05
Call-Ask
1.00
.25
.15
Strike
17.50
20.00
22.50
Put-Bid
.65
2.30
4.60
Put-Ask
.90
2.60
5.10
The one with the highest MAXIMUM payoff, regardless of probability is the [long/short],
[call/put] butterfly, with the payoff of [amount]. (Round dollar answer to the nearest
dollar).
Transcribed Image Text:17. You are considering a butterfly spread for ZEUS (Olympic Steel) currently trading for $17.67 per share ask. You study these quotes: Call-Bid .75 .10 .05 Call-Ask 1.00 .25 .15 Strike 17.50 20.00 22.50 Put-Bid .65 2.30 4.60 Put-Ask .90 2.60 5.10 The one with the highest MAXIMUM payoff, regardless of probability is the [long/short], [call/put] butterfly, with the payoff of [amount]. (Round dollar answer to the nearest dollar).
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