1. Suppose you buy 4 June PHLX call options with a 90 strike price at a price of 2.1(/). What is the total USD cost of the above calls, in the absence of brokerage fees? The size of a euro contract is 62,500. a. $5,250 b. $5,950 c. $6,200 d. $4,800

1. As a swap dealer you acted as a counterparty in an interest rate swap. Assume that the notional principal for the swap was $8.5 million. You will need to make 6 annual payments of 8% interest. You will collect annual floating payments and the floating rate that you will receive is 8.2%. If interest rates do not change over the next five years, what will be your annual net inflow? a. $55,000 b. $40,000 c. $17,000 d. $25,000 e. $10,000