1. (3 points) If you believe that the price of a stock is going to decrease significantly in the near future, which of the following would provide a profit for you (make bold all of the correct answers)? a. Buy an at-the-money call option. b. Buy an at-the-money put option. c. Sell an at-the-money call option. d. Sell an at-they-money put option. 2. Lemon Computer is a publicly-traded firm that is currently engaged in a lawsuit over its patents. If it wins the lawsuit, the stock price is expected to increase by 30%. If it loses the lawsuit, its stock price is expected to fall by 30%. Which option strategy would most likely generate a profit of situation? (3 points) Using the following information, calculate the portfolio value on the exercise date and the profit from your strategy. Stock price today = So-$100 Strike Price=X = $100 Call Price =$12.34 Put Price = $9.87 Scenario 1: Lemon wins the lawsuit and the stock price increases to $130. (3 points) Scenario 2: Lemon loses the lawsuit and the stock price falls to $70. (3 points)