Problem 2-16

Which security should sell at a greater price?

a.	A 10-year Treasury bond with a 6.0% coupon rate versus a 10-year T-bond with a 7.0% coupon.

	A 10-year Treasury bond with a 6% coupon rate.
	A 10-year T-bond with a 7% coupon.

b.	A 3-month expiration call option with an exercise price of $50 versus a 3-month call on the same stock with an exercise price of $45.

	A 3-month expiration call option with an exercise price of $45.
	A 3-month expiration call option with an exercise price of $50.

c.	A put option on a stock selling at $80, or a put option on another stock selling at $85 (all other relevant features of the stocks and options may be assumed to be identical).

	A put option on another stock selling at $85.
	A put option on a stock selling at $80.