1. A bond pays annual interest. Its coupon rate is 7.2%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 4.2%. The modified duration of this bond is ______ years.
2. A bond with a 8-year duration is worth $1,090, and its yield to maturity is 9.0%. If the yield to maturity falls to 8.74%, you would predict that the new value of the bond will be approximately
3. You have the following information: Put: X=$30, Premium=$5 Call: X=$40, Premium=$8 You bought the stock when it was $35 Scenarios: S=5, S=32, S=65 Given above information, please calculate the net payouts for a covered call strategy for each different scenario.