Peterson sued Dylan for libel. After Peterson testified that Dylan wrote to Peterson's employer that Peterson was a thief, Dylan offers evidence that Peterson once stole money from a former employer. The evidence of Peterson's prior theft is 
admissible, as substantive evidence to prove that Peterson is a thief.  admissible, but only to impeach Peterson's credibility.  inadmissible, because character may not be shown by specific instances of conduct.  inadmissible, because such evidence is more unfairly prejudicial than probative. 