Problem 1:

Which creates a STRIP?

1.

buy two $55 puts, buyone$55 call

2.

sell two $55 put, buy one $60 put and buy one $65 put

3.

buy one $55 put, buy one $65 call

4.

buy one $55 put, buy one $65 put and sell two of $60 puts

5.

sell one $55 put, buy one $60 call

Problem 2: Suppose an investor writes 6 naked put option contracts on a stock. If the put option price is $12, strike price is $55 and share price $60, what would be the initial margin requirement?

(note.one option contract=100shares)

$21400

$10500

$20500

$11400