Consider the following information about some financial options traded on the Montreal Exchange:

ArticPalmTrees Corp. - Call and Put options
Option	Expiry	Last Price ($)	Volume	Strike ($)
Call	Oct 2020	7.65	23	68
Call	Jan 2021	5.85	140	72
Put	Oct 2020	10.60	35	74
Put	Jan 2021	16.15	5	80

ArticPalmTreess stock currently trades at $62.5

a. Joe does not hold any ArticPalmTrees stocks. He thinks that the stock price will decline by the end of 2020. He tells you that the 74 October PUT is deep out-of-the money, and that he wants to sell it to take advantage of its high premium. Joe claims that this strategy is not risky. Assuming that you also think that ArticPalmTrees stock price will decline, do you agree with Joes analysis and strategy? Briefly explain. No calculations needed. (4 points)

b. Calculate Joes maximum possible losses per contract, ignoring brokerage fees. Show calculations. Use 2 decimals. (2 points)