The next question is based on the following data for a fictitiously named company OPPS:

• The current stock price S is $23.
• The time to maturity T is six months.
• The continuously compounded, risk-free interest rate r is 5 percent per year.
• European option prices are given in the following table

Strike Price	Call Price	Put Price
K1 = $17.5	6.00	0.10
K2 = 20	4.00	0.50
K3 = 22.5	2.00	1.00
K4 = 25	1.00	2.50

Suppose you go long one call with a strike price K1 = 17.50, sell one call with K2 = 20, sell one call with K3 = 22.5 and buy one call with K4 = 25. Then which of the following statements is INCORRECT?

1. You have set up a condor spread.
2. You have set up a trade that bets on the volatility being low.
3. The portfolio has zero-profits when the stock price at expiration is $18.5 and $24.
4. The maximum loss is $1.
5. The maximum profit is $2.