Final answer:
The title of the story, 'The Gift of the Magi', should either be put in quotation marks or italics. However, given that 'The Gift of the Magi' is a short story, using quotation marks would generally be the preferred method according to English language conventions.
Step-by-step explanation:
When punctuating or formatting the title of a story, such as 'The Gift of the Magi', standard formatting in English suggests using either italics or quotation marks. Therefore, Option 1: Quotation marks, and Option 3: Italics, would be correct. This represents the proper way to distinguish titles of shorter works or parts of a whole.
Option 2: Bold and underlined and Option 4: Bold are not generally used in formal written English for titles, even though they might visually set the title apart.
To decide between italics and quotation marks, the common guideline is that titles of short stories should be put in quotation marks, while titles of longer works, like novels or textbooks, should be italicized. So based on these conventions, the title 'The Gift of the Magi', which is a short story, should be placed in quotation marks.
Learn more about Punctuation of Titles