What is the initial cash flow of butterfly spread strategy

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1. Suppose you are creating a butterfly spread using call options with 3 different strike prices. Currently, the call price with strike price of $40 is $20.63, the call with strike price of $50 is $11.15, and the call with strike price of $60 is $6.16. What is the initial cash flow of the butterfly spread strategy? If it's a cash outflow, then answer in a negative number.

2. The objective of hedging is to make more profits.

True

False

Reference no: EM13948851

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