A dealer forecasts that the discount rate on a 60-day bill will be 4.10% 30 days from now. The current 4, discount rate on a 90-day bill is 420%. What is the highest 30-day repo rate the dealer can afford to pay and still expect to break even on a repo using the current 90-day bill? Explain. 5. An investor "shorts" a stock and protects her position by purchasing a call on the stock at an exercise price that makes the call "on (or at] the money." (a) Show (carefully) what the resulting profit profile will look like. Explain. (b) The result in (a) will look like purchasing a put on the stock. Which would be better for the investor, shorting plus buying the call or buying a put directly? Explain. 6. I offer to borrow money from you for 90 days at the following interest rate quotations: A. a discount rate of 6.000%. B. a simple interest money market rate of 6.101%. C. a "bond equivalent" y ield (simple interest 365 day) rate of 6210%. Which is the better deal from your point of view? Explain your calculations or reasoning