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(McMillan) XYZ is at 70. One may be able to establish a low-debit butterfly spread...

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Finance

  1. (McMillan) XYZ is at 70. One may be able to establish a low-debit butterfly spread with the strike price of 50s, 60s and 70s if the following price exist: XYZ common, $70 XYZ July 50 call, $20 XYZ July 60 call, $12 XYZ July 70 call, $5
  1. Calculate the net debit (credit).
  2. Draw the payoff chart for the butterfly spread.
  3. Calculate the maximum profit, maximum loss.
  4. Is this a neutral strategy? Why?

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