3. X transfers a publicly traded marketable equity security to Y with a date-of transfer price equal to $25. For each of the following transfer provisions [considered independently], identify the affected condition (#1, 2 or 3) for sale accounting and whether the provision prevents sale accounting for the transfer.

1. A legal letter included a would opinion stating that the security would be beyond the reach of the powers of a bankruptcy trustee of X. Thus, the transferred asset is isolated from X. (7pts)
2. Y may sell the security to a third party. In the event when X exercise a call option to buy back the security, Y may purchase the same security from the open market as a replacement. (7pts)
3. X writes a put to Y, having an exercise price of $29 (Giving Y the right to sell at $29). The asset price is unlikely to rise beyond $28. (7pts)