Q1. A bond has 4 years to maturity, a coupon of 9 percent paid annually and currently sells at par.What is the duration of the bond?

A. 3.53 years

B. 4.90 years

C. 3.74 years

Q2. Given the following parameters use risk-neutral valuation to value a call option.

Current stock price:$85.00

Stock will increase or decrease next year by:15 pct.

Call Option strike price:$82.00

Time to expiration:1 yearRisk free rate:8 pct.

A. Value of call: $11.18

B. Value of call: $14.58

C. Value of call: $9.07