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MTH Q1

Question 1. A call butterfly with strikes (K1,K2,K3) is a portfolio consisting of long 1 K1 call, short 2 K2 calls, and long 1 K3 call, all with maturity T . Find the payout function at maturity T for a call butterfly with strikes (70, 80, 110). Graph the payout at maturity as a function of the stock price.

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