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All main topics / Finance & Investment / Derivatives / Derivatives
185
5.What is the number of different option series used in creating a butterfly spread?
A.1
B.2
C.3
D.4
Answer: C

Three different options all with the same maturity are involved in creating a butterfly spread. The strike prices are usually equally spaced. The creator buys the low strike option, buys the high strike option, and sells two of the intermediate strike option
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015

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