Consider a condor made up of calls at strikes 90,95,100,105,and a butterfly call spread at strikes 90,97.5,105.Which of the following statements is valid?
A) A condor is worth less than the butterfly spread irrespective of the level of the stock price.
B) A condor is worth more than the butterfly spread irrespective of the level of the stock price.
C) A condor is worth less than the butterfly spread when the stock price is less than 90.
D) A condor is worth more than the butterfly spread when the stock price is greater than 105.
Correct Answer:
Verified
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