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1. AXA issued two bonds: A and B, both at par. A has coupon rate of 10% and terms of 10 years. B has coupon rate of 6% and terms of 10 years. B has 10 warrants atached to it. What is the value of the 10 warrants?

2. A put option with exercise price of 50 has one month till expiration. What would be cash flow to the put option holder if the stock price at expiration is 52? or 45? What would be cash flow to a person who is short the put option?

3. A bond with a duration of 8 has a current price of $1185.04, and its yield to maturity is 7.52%. If the yield to maturity changes to 7.21%, you would predict that the new value of the bond will be _________. State your answer as a dollar amount with two decimal places.

Financial Management, Finance

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