1. Calculate the effective annual interest rate for (1) A 3-month T-bill selling at $97,865 with par value $100,000. (2) An 8% coupon bond selling at par and paying coupons semiannually. Which security has a higher effective annual interest rate? Coupon bond or T-bill.
2. Write 2 financial statements for two reputable companies listed in stock exchange. The two companies should have good truck record.
3. You buy a put option on a stock for a premium of $4.36. The current stock price is $56, and the option strike price is $46. What is your break-even stock price?