1. You manage your personal investments, which have bonds and options. Answer the following practical investment questions (to see if you can get some usefulness from this class)
2. A recession hits, and the firm's default risks increase. Will the price of its bonds increase or decrease? First, answer the question then briefly explain.
   1. Inflation is high, so the central bank decides to increase the interest rate. Will the price of your bonds increase or decrease? First, answer the question then briefly explain.
   2. You have bought some call options on stock A, which does not pay dividends. Suddenly Yahoo Finance has an article telling you stock A is a great investment. So, you decide to exercise your call options for stock A because you really want the stock. Your friend calls you a fool, "you should have just sold your call options and used the proceeds to buy stock A!". Is your friend right or wrong? First, answer the question then briefly explain.
   3. You're selling call options. And your friend tells you the loss from selling call options is unlimited. Is your friend right or wrong? First, answer the question then briefly explain.
   4. You're selling put options. Is the loss from selling put options unlimited or not? First, answer the question then briefly explain.