D)Corporate bond - maturity 1.5.2025- fixed coupon- semiannual payment- rating A1 o)Which bond has the lowest price? bjWhy? 3. An investor takes a short position with a call option on stock A strike price 3,1 euro and premiumP 0.5 euro. He has the underlying stock A in his portfolio. He bought stock A at 3,1 euro Suppose two following scenarios at the expiration of short call option A) Stock price 6,7 euro B) Stock price 1,5 euro Whot is the final payoff for investor in the two different scenarios? 6 Open questions (2,5 points each question) 15 points 1.Do you explain the bootstrapping to build the term structure? 2. What are the differences between the Capital Market Line and Security Market line also showing the equations? 3 You need to calculate Information Ratio. ajWhich components do you will use b) what is the benefit for active manager? 4. What is in the financial context the definition of coefficient of correlation? S What are the differences between the following structured bond: a) reverse convertible bond bl reverse floater bond c) inflation bond, by side the investor? 6. Which types of derivatives would be appropriate for a hedger who believes stock market soon will decrease