Draw the payoff - stock price, Business Economics

Financial engineering deals with the design of new assets. Draw the payoff (at t=1) of the following bull butterfly spread:

Purchase 1 call with exercise price a

Sell 2 calls with exercise price (a+b)/2

Purchase 1 call with exercise price b
 
as a function of the underlying stock price S at t=1 (where a

Posted Date: 3/23/2013 2:28:20 AM | Location : United States







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