1. If the top marginal income tax rate of households went from 30% to 27%, how should that affect prices on municipal bonds? Discuss this in the context of a municipal bond that had a yield of 3.5% before the tax reform.
2. Suppose a put option on XYZ stock has a price (or "premium") of $3.00 and a strike price of $52. You decide to long the put option, and suppose that at expiration XYZ stock sells for $56. What is your payoff at expiration and what is your profit?
3. The only way that a party can discharge a contract is by performance.