A stock is currently trading at a price of $1 14

A stock is currently trading at a price of $1 14. You construct a butterfly spread using puts of three different strike prices on this stock, with the puts expiring at the same time. You go long one put with an exercise price of $1 10 and selling at $3.50, go short two puts with an exercise price of $1 15 and selling at $6, and go long one put with an exercise price of $120 and selling at $9.

A. Determine the value at expiration and the profit for your strategy under the following outcomes:

i. The price of the stock at the expiration of the puts is $106.

ii. The price of the stock at the expiration of the puts is $1 10.

iii. The price of the stock at the expiration of the puts is $1 15.

iv. The price of the stock at the expiration of the puts is $120.

v. The price of the stock at the expiration of the puts is $123.

B. Determine the following:

i. The maximum profit

ii. The maximum loss

iii. The stock price at which you would realize the maximum profit

iv. The stock price at which you would incur the maximum loss

C. Determine the breakeven underlying price at expiration of the put options.

D. Verify that your answer to Part C above is correct.