1. A 2-year bond pays a coupon of $20 every 6 months and its par value is $1,000. The bond's yield is 6% with continuous compounding.

a. What is the bond's theoretical price?

b. What is the bond's maturity?

c. How would the bond's theoretical price change if its yield increases by 1 basis points?

2. Michael takes a short position in 20 futures contracts on a day. The initial margin is $2,000 per contract, and the maintenance margin is $1,500 per contract. Each day after the market is closed, if the balance of Michael's margin account is below the maintenance margin, he is required to add funds into his margin account to make its balance equal to the initial margin. The futures prices on the following trading days are as below (Michael takes his position on day 0):

Trading day	Settlement price per contract ($)
0	10,000
1	10,200
2	9,800
3	10,100
4	10,200
5	10,450
6	10,550
7	10,300
8	10,750
9	11,100
10	10,900