1) Which security should sell at a higher price: A 3-year treasury note with a 3% coupon rate versus a 3-year treasury note with a 4% coupon rate?

2) Which security should sell at a higher price: A 3-month treasury bill or a 6-month treasury bill?

3) Which security should sell at a higher price: A 3-month expiration put option with an exercise price of $80 versus a 3-month put on the same stock with an exercise price of $85?

4) Which security should sell at a higher price: A call option on a stock selling at $40, or a call option on another stock selling at $50 (all other relevant features of the stocks and options is assumed to be identical.)

5) Suppose investors can earn a return of 1.5% per 3 months on a treasury note with 3 months remaining until maturity. What price would you expect a 3-month maturity treasury bill to sell for?

6) What is the after-tax return to a corporation that buys a share of preferred stock at $35, sells it at year-end at $35, and receives a $5 year-end dividend? The firm is in the 20% tax bracket.

7) An investor is in a 30% tax bracket. If a municipals bond offer a return of 6.75%, what is the equivalent taxable yield for this the investor?

8) Go to yahoo finance. What is the last price for an option on Apple stock with expiration of April 21st,2017 and exercise price of $120? (when you are doing this assignment, make note of time/date)

a. Now Suppose you buy this option at this price. If the stock price on April 21st 2017 is $125, will you exercise your call? What is the profit on your position?

b. What if you had bought an April call with exercise price $100?

c. What if you had bought an April put with exercise price $120?