1. For a change in which of the following inputs into the Black-Scholes-Merton option pricing model will the direction of the change in a put’s value and the direction of the change in a call’s value be the same?
A. underlying stock price.
B. Exercise price.
C. Volatility.
D. Risk-free rate.
2. A 6% $1,000 bond matures in 4 years, pays interest semiannually, and has a yield to maturity of 6.85%. What is the current market price of the bond? Please so work.
3. Over the past 4 years an investment returned 18%, -9%, -12% and 15%. What is the standard deviation of returns.