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please type the steps of the answers 1. 5 pts. (fill in the blanks) June call and put options on King Books Inc. are available

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1. 5 pts. (fill in the blanks) June call and put options on King Books Inc. are available with exercise prices of $20, $35. and $40. Among the different exercise prices, the call option with the exercise price and the put option with the exercise price will have the greatest value. 2. 5 pts. You put up $30 at the beginning of the year for an investment. The value of the investment grows 4% and you earn a dividend of $3.50. What is the holding-period return for this investment? ANSWER: SOLUTION: 3. 5 pts. A tax free municipal bond provides a yield of 2.4%. What is the equivalent taxable yield on the bond given a 28% tax bracket? ANSWER: SOLUTION: 4. 5 pts. Suppose you pay $9,500 for a $10,000 par Treasury bill maturing in 3 months. What is the holding-period return for this investment? ANSWER: SOLUTION: 5. 5 pts. The holding-period return on a stock was 32%. Its beginning price was $15, and its cash dividend was $0.50. Its ending price must have been ANSWER: SOLUTION: 6. 20 pts. Your investment has a 40% chance of earning a 15% rate of return, a 50% chance of earning a 10% rate of return, and a 10% chance of losing 8%. What is the standard deviation of this investment? ANSWER: SOLUTION

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