QUESTION 1 A stock index spot price is $1,287. The zero coupon Interest rate is 3.8%. What is the potential arbitrage profit if the 6-month futures contract on the index is priced at $1,3507 O $39.00 $19.50 $63.00 $31.50 DE QUESTIONS Suppose you find two bonds identical in all respects except that bond Als convertible to common stock and bond is not. Bond Ais priced at $1,245 and bond B is priced at $1,120. Bond A has a promised yield to maturity of 5.6% and bond B has a promised yield to maturity of 6.7%. The stock of bond A is trading at $49.80 per share. Which of the following statements is (are) correct? 1. The value of the conversion option for bond A is 5125. II. The lower promised yield to maturity of bond A indicates that the bond is priced according to its straight debt value rather than its conversion value. 1. If bond A can be converted into 25 shares of stock, the investor would break even at the current prices. Oll only III, and I and ill only lll only