8 Questions... not 20. please see attached. must show work.

1. A municipal bond has a yield of 4% while the yield of a comparable corporate bond is 5%. For each marginal tax bracket below, which bond (muni or corporate) provides the higher after tax yield if your tax bracket is: (show work) a. zero; b. 10%; c. 20%; d. 30%; 2. i) Which of the four options below is the riskiest investment in terms of exposing the investor to the highest possible loss? a. writing or short a call option b. writing or short a put option c. buying or long a call option d. buying or long a put option ii) Draw the payoff diagram of the option that corresponds to the correct answer above. 3. You place a stop-loss order to sell 1000 shares of stock at $60 when the current price is $72. How much will you receive for each share if the price drops to $50? a) $50 b) $60 c) less than $59.95 but more than 50 d) can't tell from information given 4. Would a portfolio manager of an actively managed stock mutual fund believe that markets are efficient? Why or why not? 5. Competing banks offer the same 7% annual yield on a 5-year CD. Bank A's CD offers annual compounding; while Bank B's CD offers monthly compounding. If you're looking to invest $10,000, which bank's CD do you select and why? 6. You are bullish on FaceBook (FB). The current price is $50/share and you have $5,000 of your own money to invest. You borrow an additional $5,000 from your broker at an interest rate of 8% per year and invest a total of $10,000 in the stock. The stock does not pay a dividend. a. What is your rate of return if the price of FB stock RISES by 10% during the next year? b. What is your rate of return if the price of FB stock FALLS by 10% during the next year? c. Discuss the impact margining has on your return. 7. You are to receive $500 at the end of one year; $250 at the end of two years; $300 at the end of three years. If the interest rate is 5%, what is the present value of these cash flows? 8. Assuming the cash flows above, what is the future value of these flows at the end of year 4