1. Gugenheim, Inc., has a bond outstanding with a coupon rate of 6.2 percent and annual payments. The yield to maturity is 7.2 percent and the bond matures in 16 years. What is the market price if the bond has a par value of $2,000?
2. If you write a call, hoping to benefit from the time decay of the options premium, which one of the following measures would you use?
a. Theta, expressed in percentage
b. Theta, expressed in dollars
c. Delta, expressed in percentage
d. Delta, expressed in dollars
e. Gamma, expressed in percentage
3. You establish the following position: Short 1 ABCD 320 Put @ 6 If the delta of the put is 0.50 and the gamma is 0.03, what would the new delta be if ABCD decreases from 321 to 320?
a. 0.47
b. 0.50
c. 0.53
d. 0.56
e. 0.60