Please explain your answer.

1. Suppose you short one IBM May 100 put contract at $5 and long one IBM May 105 put contract at $2. Your maximum profit/loss from your strategy would be Multiple Choice

gain of $200.

loss of $300.

loss of $200

gain of $300.

None of the above.

2. Suppose you purchase one WFM May 100 put contract at $5 and write one WFM May 105 put contract at $2. The maximum potential profit/loss per contract of your strategy will ________, if both options are exercised.

Multiple Choice

gain of $600

loss of $800

gain of $200

loss of $300

None of the above