What Happens to the Long Position in a 90-100-110-Strike Call

question 17

Multiple Choice

What happens to the long position in a 90-100-110-strike call butterfly spread if all the calls are replaced with puts of identical strike and maturity?

• A)There is no change in the risks and cash flows of the original position.
• B)The new position is the same as holding a short position in the original call butterfly spread.
• C)The new position is the mirror image of the original one if you consider the x-axis as a mirror.
• D)The gross payoffs remain the same,but the net payoffs are different.

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Definitions:

Canada

A country located in the northern part of North America, known for its vast wilderness, diverse cultures, and strong economy.

Large-scale Clear-cutting

The practice of cutting down all the trees in a large area at once, a controversial method of logging that can have significant environmental impacts.

Habitat Fragmentation

The process by which large and continuous habitats are divided into smaller, isolated patches, often due to human activities.

Biodiversity

the variety and variability of life forms within a given ecosystem, region, or the entire Earth.