1. You write a put with a strike price of $60 on sock that you have shorted at $60 (this is a covered put). What are the expiration date profits to this position for stock prices of $50, $55, $60, $65, and $70, if the put premium is $1.80?

2. Suppose you are thinking about purchasing a small office building for $1,500,000. The 30-year fixed-rate mortgage that you have arranged covers 80% of the purchase price and has an interest rate of 8%. Assume you were to default and go into foreclosure in year 10 of this loan. If the lender was able to sell this property for $700,000, how much does the lender stand to lose in the absence of PMI?