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1. A default-free zero-coupon bond costs $80 and will pay $90 at maturity in 1 year. What is the effective annual interest rate? (In percentage)

1. A default-free zero-coupon bond costs $80 and will pay $90 at maturity in 1 year. What is the effective annual interest rate? (In percentage)

2. Suppose you buy the S&R index for $1000 and buy a 950-strike put with $51.777. What is the value of zero-coupon bond if buying a 950-strike call with $120.405?

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