1. The price of a stock is $72. A trader buys 1 put option contract on the stock with a strike price of $70 when the option price is worth $5. When does the trader make a profit at maturity?
2. The Kaufman’s have decided to buy a house that costs $260,000. After a down payment of $20,000, they can get an interest rate of 7.8%. Find their monthly payments if they set up a 30 year loan What is the total amount they will pay for the house? How much total interest will they wind up paying on the loan?