1-The current price of a stock is $30. The breakeven price of the buyer of a call option with a strike of $35 and an option premium of $1.50 is : (2 points)

2-Suppose an investor can choose between investing his $10,000 in a stock or call options. Show how an investment in call options can be more profitable if the stock trades today at $10, the strike price is $10 and the call option at $2. (the size of each call is 100 shares). Use a 6-month stock price at expiration of $20 (3 points)

3-What is the dirty price of a 5% coupon US corporate bond, yielding 2% and maturing December 31, 2025? (3 points)

4-What is the 6-month EUR/USD forward when the exchange rate is 1,1250. The 6-month interest rates in the US and Europe are respectively 2% and 0,5%. (3 points)

5-Explain how the US current account would be affected with Trumps protectionist policy? (3 points)

6-Assume that a firm currently has earnings of $20 per share. Investors expect earnings growth of 4% for the next three years. The mean P/E ratio of all other firms in the same industry is 12

a-calculate the expected stock price in 3 years (2 points)

b-From your answer in a) and If expected dividend for the next 3 years is $3 per year

and if the investors required rate of return is 11%, calculate what the value of the stock should be today. (2 points)

7-Why do you think you failed your initial exam. Make sure to answer honestly and co to get the extra point bonus (1 point)

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