1. For every exchange-traded currency option, the counterparty for a buyer is _____, and the counterparty for a seller is _____.

a) Option Clearinghouse / Option Clearinghouse

b) Securities and Exchange Commission / Securities and Exchange Commission

c) Over-the-counter bank / Option Clearinghouse

d) Over-the-counter bank / Over-the-counter bank

e) Securities and Exchange Commission / Option Clearinghouse

2. A bond has a $1,000 par value, 11 years to maturity, and pays a coupon of 6.75% per year, annually. You expect the bond’s yield to maturity to be 6.0% per year in four years. If you plan to buy the bond today and sell it in four years, what is the most that you can pay for the bond and still earn at least a 10.0% per year return on your investment?

1) $949.78

2) $1,011.36

3) $925.58

4) $963.56

5) $1,003.89