An increase in which of the following would increase the time value of a call option on common stock, ceteris paribus? I. Stock price II. Stock price volatility III. Time to expiration IV. Exercise price A) II only B) II and IV only C) II and III only D) I, III and IV only Your firm enters into a swap agreement with a notional principle of $40 million where the firm pays a fixed-rate of interest of 5.50% and receives a variable-rate of interest equal to LIBOR plus 150 basis points. If LIBOR is currently 3.75%, the NET amount your firm will receive (+) or pay (-) on the next transaction date is A) -$2, 200,000 B) $2, 625,000 C) $125,000 D) -$100,000 E) -$875,000 You have bought one April 15th put option contract on Amazon's stock. The option has an exercise prices of $555/share with a premium of $20.43/share. Currently Amazon's stock trades at S552.08/share. What will your net profit be if Amazon's stock price decreases to $530/share at the expiration of the option? A) -$165 B) $165 C) $457 D) $2, 043 E) $2, 500 A commercial bank has $200 million of floating-rate loans yielding the LIBOR + 2%. These loam are financed by $200 million of fixed-rate deposits costing 9%. A savings association has $200 million of mortgages with a fixed rate of 13%. They are financed by $200 million of CDs with LIBOR + 3%. The two financial institutions have reached agreement on an interest rate swap with the fixed-rate swap payment at 9% and the variable-rate swap payment at LIBOR + 1%. Which of the following statement is correct about the interest rate swap? A) The commercial bank agrees to pay 1% and receive LIBOR + 1%. B) The savings association agrees to pay 9% and receive LIBOR + 1%. C) The commercial is the buyer of the interest rate swap. D) The savings association is the seller of the interest rate swap. If you can convert 150 Swiss francs to $90, the exchange rate is A) 1.67 $/sf B) 1.50 sf/$ C) 0.67 $/sf D) 1.67 sf/$ E) 0.90 $/sf