1. Suppose you buy a call option on a $100,000 Treasury bond futures contract with an exercise price of $98,000 for a premium of $500. If on expiration the price of the futures contract is $98,500, what is your profit or loss on the contract? Show your work.
2. Tresnan Brothers is expected to pay a $1.2 per share dividend at the end of the year (i.e., D1 = $1.2). The dividend is expected to grow at a constant rate of 9% a year. The required rate of return on the stock, rs, is 19%. What is the stock's current value per share? Round your answer to two decimal places.