1.Assume yourself buying a car insurance which can get renewed on annual basis. Now, think generally, can this case be considered as an option? If yes, then which type? (2 marks)

2.Can we say that short positions loss and long positions gain is equal? Explain. (3 marks)

3.Suppose you hold a bond for which youre certain that its default-free. Can you designate the yield to maturity on this bond as the actual return that you will receive, rather than a promised return?