1.The spot price of an investment asset that provides no income is $30 and the risk-free rate for all maturities (with continuous compounding) is 10%. What is the four-year forward price?

a)$20.11

b)$44.75

c)$35.64

d)$40.50

2.All else equal, the discount rate is ______ when the interest rate is higher.

a)unchanged

b)None of above is true

c)lower

d)higher

3.Which of the following is true?

A)A call option gives the party in short position the right to buy an asset by a certain date for a certain price

B)Entering into a forward contract means the investors are obligated to buy or sell an asset

C)The holder of a call or put option must exercise the right to sell or buy an asset

D)A put option gives the party in short position the right to sell an asset by a certain date for a certain price