1. Correct answer that included in gross income for federal tax purposes?
a. As an employee of Air Canada, Ethel flew to the UK in an empty seat on the plane
b. Chris received $600 of unemployment compensation after he was laid off from his job
c. Exxon reimbursed Donna for her legal expenses she paid when she adopted her son
d. Audrey’s son is enrolled in her employer’s day care center located in her office building
2. Given information about bonds A,B, and C having the same default risk
Bond Price CF year CF year 2
A 96 100 0
B 91 0 100
C ? 10 110
What is the no arbitrage price of bond C?