1. Put Options and Call Options

a) Both can be bought and sold

b) Only Call Options can be bought and sold

c) Only Put Options can be bought and sold

d) It doesnt matter, to be bought and sold means the same

2) As an investor, you are thinking of Investing in a Treasury Bill in the secondary market. Face Value is $5,000, however, price now is $4500 (90.0%), and the maturity date is 300 days from today. However, you're considering selling the Bill in 180 days, what would be your rate of return if you sell the Bill 180 days before the maturity getting $4700.

3) what would be the Present Value of a Treasury Bill in the primary market if its Face value is $2,500, interest rate is 2.5%, and the maturity date is 300 days.

4) what would be the value of preferred stock (perpetual) of APPLEs if it pays an annual dividend of $2.55 and the investors require a rate of return of 5%?

5) Imagine you purchase a call option on shares of Intel (INTC) with a strike price of $40 and an expiration date of April 16th. This option would give you the right to purchase 100 shares of Intel at a price of $40 on April 16^th. At what price will make sense to execute the option? (5 points)

6) Imagine you purchase a call option on shares of Intel (INTC) with a strike price of $40 and an expiration date of April 16th. This option would give you the right to purchase 100 shares of Intel at a price of $40 on April 16^th. At what price will make sense to execute the option?

A) At $40

b) Above $40 + premium cost

c) Below $40

d) Below $40 + premium cost

7) The Johnson Corporation issues a bond which has a coupon rate of 10.20%, a yield to maturity of 10.55%, a face value of $1,000, and a market price of $850. Therefore, the annual interest payment is

a) $101.75.

b) $102.

c) $105.50.

d)$120.0.

8) Marion owns a corporate bond with a coupon rate of 8% that matures in 10 years. Ruth owns a corporate bond with a coupon rate of 12% that matures in 25 years. If interest rates go down, then

a) The value of Andre's bond will decrease, and the value of Ruth's bond will increase.

b) The value of both bonds will increase.

c) The value of Ruth's bond will decrease more than the value of Andre's bond due to the longer time to maturity.

d) The value of both bonds will remain the same because they were both purchased in an earlier time period before the interest rate changed.