1. What is the value of the following call option on the expiration date: Current stock price = $41 Stock price on date of purchase = 44 Price paid for option=$0.15 Exercise price = 28

2. The main difference between warrants and a convertible bond is:

(a) warrants only last for a year

(b) warrants allow for equity and debt participation at the same time

(c) convertible bonds have lower rates than bonds with warrants

(d) investors prefer convertible bonds

(e) convertible bonds add an additional source of income for the firm