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  3. 1. suppose tom buys a call option contract with a

1. Suppose Tom buys a call option contract with a strike of $47.00. The expiration...

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Finance

1. Suppose Tom buys a call option contract with a strike of $47.00. The expiration price is $52. The premium is $5 per contract. What is the profit of the option per contract?

a. 2

b. 0

c. 5

d. -5

2. Which type of bond incurs less interest rate risk?

Select one:

a. A 10-year bond with zero coupon

b. A 10-year bond with a 9% annual coupon

c. 4, 2, 3, 1, 5

d. A 5-year bond with zero coupon

e. A 5-year bond with a 9% annual coupon

3.

Which is not a characteristic of the money markets?

Select one:

a. High Liquidity

b. Sold in large denominations

c. High default risk

d. Used to meet short-term needs

4.

If you pay $985 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate?

Select one:

a. 6.93%

b. 6.02%

c. 6.11%

d. 5.93%

5.

There is a financial crisis in Europe. If the yield on IBM bonds increase what kind of risk affected the increase in the yield?

Select one:

a. Downgrade risk

b. Credit spread risk

c. Default risk

d. reinvestment risk

Please answer all thank you!!

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