1. How much would you pay for a P&G Bond that pays a 5% coupon, matures in 20 years and the yield on current bonds are 4%?
2. Describe the essentials of an efficient market.
3. There is a critical meeting where OPEC members are going to discuss whether to reduce of increase oil supply. Current price of oil is $77. Use put and call options to design a strategy profitable in case of possible big positive and negative price swings.