Todays share price of Apple is $160. You think Apples stock will fall over the next 3 months. Today you observe the following option prices (all expiring in 3 months):

Option 1: Put Option Premium = $4; with a Strike Price = $140

Option 2: Put Option Premium = $2; with a Strike Price = $130

17. Which of these options is in-the-money today?

A) Both

B) Neither

C) Only Option 1

D) Only Option 2

18. Today you buy Option 1 and sell Option 2; (i.e. bear Put vertical spread). At expiration the stock price equals $134. What is your profit or loss (on a per share basis)?

A) You are at breakeven

B) A loss of $2

C) A loss of $4

D) A profit of $4

E) A profit of $6

19. Suppose you purchase Option 1 and also purchase Option 2. What is your breakeven stock price (on a per share basis) at expiration?

A) $124

B) $126

C) $134

D) $136

E) $138