1. Calculate the percentage return on a 1-year treasury bill with a face value of 10,000 if you pay 9,000 to purchase it and receive its full face value at maturity.
2. Why is the price of a call option higher when the volatility of the underlying stock is higher? Explain.
3. Which of the following ratios would a potential creditor be interested in
a, Times interest earned, b. EVA c.ROE d. net profit margin