1. Consider the following scenario.Call #1:execrcise price=$40,premium=$12 .Call #2:exercise price=$60,premium=$6.What is th ebreak even for a bull spread using these calls?
2. What is the impact of the Fed Policy on the equity market (last 10 years, say)?
3. The Wall Street Journal reports that the current rate on 10-year Treasury bonds is 2.85 percent and the rate on 20-year Treasury bonds is 5.10 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a 10-year Treasury bond purchased ten years from today, E(10r10).