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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