1. How would a bank have a maturity imbalance problem.
2. What is the formula for delta of the option as a function of (U,D,R, Vu, Vd)?
3. How much money will you have in 16 years if you invest $10,000 in a savings account that earns an annual interest rate of 6% compounded monthly?
4. A firm incurs $40,000 in interest expenses each year. If the tax rate of the firm is 30%, what is the effective after-tax cost of interest for the firm?