1. Suppose you own 448 shares of stock and want to hedge by writing call options. A call option is available on the stock and has a delta of 0.2. How many options are needed to create the hedge? Enter your answer as a positive number rounded to the nearest integer.
2. Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium:R^ = 13.25%; rRF = 6.75%; rM = 8.5%. Round your answer to two decimal places.
3. Explain bond features in detail and explain the importance of yield-to-maturity. In addition, explain stocks and preferred stocks. Explain why you would, as a personal investor, invest or not invest in stocks or bonds.