Question
1An interest rate is 6% per annum with continuous compounding. What is the equivalent rate with semiannual compounding? A)5.99% B)6.29% C)6.09% D)6.19% 2.Which of the
1An interest rate is 6% per annum with continuous compounding. What is the equivalent rate with semiannual compounding?
A)5.99%
B)6.29%
C)6.09%
D)6.19%
2.Which of the following is NOT a theory of the term structure
A)Expectations theory
B)Liquidity preference theory
C)Maturity preference theory
D)Market segmentation theory
3.Suppose that a July put option on a stock with a strike price of $50 costs $2.50 and is held until July. At maturity of the option, the stock price sits at $49. As a result, the holder of this option will
A)exercise this option and make a loss of $1.5
b)not exercise this option and make a profit of $2.5
c)not exercise this option and make no loss or profit
d)exercise this option and make a profit of $1.5
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