An investor buys 100 shares of a stock, shorts 60 call options on the stock with strike price of $20 and buys 60 put options on the stock with strike price of $10. All options are one-year European options. Draw a diagram illustrating the value of the investor’s portfolio as a function of the stock price after one year.

3. An investor buys 100 shares of a stock, shorts 50 call options on the stock with strike price of $80 and buys 50 put options on the stock with strike price of $40. All options are one-year European options. Draw a diagram illustrating the value of the investor’s portfolio as a function of the stock price after one year.

Valuing Bonds                                                 

Q1.   Suppose a 20-year, $1000 par value bond with an annual fixed 5% coupon rate (coupons paid semiannually, as are most bonds) is trading for a price of $1065.48.

a.   What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)?

b.   If this bond’s yield to maturity or YTM changes to 4% APR, what will the bond’s new price?  What is this bond’s new price if the YTM changes to 5%?

Q2.   Understanding what maturity risk means for bonds is very important.  Complete the following table by calculating the new bond prices and then the % price change that results for the two bonds given below.  For example, in the table if YTMs go up 1 percentage point (also known as 100 basis points or bp) on the short-term bond, that means that the YTM would go from 3% to 4%.  Then calculate the new price at a YTM of 4% and then calculate the % change in price from today's price of $1,000 to the new price.

Short term bond:  Face value of $1,000 with a fixed annual coupon rate of 3% with semi-annual payments, and a maturity in 2 years.  Assume that today's YTM on a 2 year bond is 3% so therefore today's price is $1,000.

Long term bond:  Face value of $1,000 with a fixed annual coupon rate of 3% with semi-annual payments, and a maturity in 30 years.  Assume that today's YTM on a 30 year bond is 3% so therefore today's price is $1,000.

this is all the data that was provided, as it is.

What questions, comments to you have about the experiences (150-250 Words)

My experience regarding love and intimate relationships is based on how I was raised by my family and traditions of American culture. Growing up, I always saw the family unit as a man and woman who made a commitment to each other, set goals together and would eventually have a family. Generationally, things are different now compared to when I married my husband. Today we have people identifying more with heterosexual, homosexual, bisexual, lesbian, gay, and transgender as well as interracial and interethnic relationships and marriages. Many girls dream about marrying someday, however, many people today are holding off getting married or choosing not to marry at all. When my husband and I chose to get married, we wanted to spend the rest of our lives making each other happy, have a family, and grow old together. We have watched our three children grow into amazing young adults and will be celebrating 25 years of marriage on New Years Day.

Sally-Anne is considering starting a business and is not sure what type of structure to use. She estimates that the annual turnover for the 2020 tax year will be $525,000 and the (taxable) net profit will be $183,000. Both Sally-Anne and her husband have private health insurance.

Calculate (showing workings) the tax she would have to pay if she sets up the business as:

a. A sole trader (no other income)

b. A partnership 50/50 with her husband (neither earn any other income)

c. A company (1 mark)

d. Advise her on which would be the best structure based on total tax payable only. (1 mark)

e. Describe 3 distinctive features of a partnership. (1.5 marks)

f. Describe 3 distinctive features of a company. (1.5 marks)

g. Given the current volatility in the economic climate, Sally-Anne is concerned about what would happen if her business collapsed. Explain her legal liability with each structure listed above and advise which structure would give her the best protection for her personal assets. (2.5 marks)

1.     Suppose the United States economy is represented by the following equations:

Z = C + I + G            C = 100 + .Y_D                     T = 200                     I = 30

Y_D = Y - T                 G = 100

Suppose that the wage and price setting relations are given by

W = P^e(1-u)

P = (1+μ) W

a.      If P = P^e and the mark-up is 20% find the real wage

b.     Calculate the natural rate of unemployment

c.      Calculate the real wage and the natural rate of unemployment if the mark-up decreases to 10%

d.     Now if P ≠ P^e and P^e =105, but markup is still 20%, what unemployment rate is compatible with the price level = 100?

e.      Derive the aggregate supply if the production function is Y = N

Stater Sisters, a privately held supermarket chain, based in San Bernardino, California, has recently started a fresh produce club to provide support to local chains and to promote the benefits of buying locally grown food. Families pay a seasonal membership fee of $100 and place their orders a week in advance for a price of $40 per order. In turn, Stater Sisters delivers fresh-picked seasonal local produce to several neighborhood distribution points. Five hundred families joined the club for the first season, but the number of orders varied from week to week.

Jack Brown has run the produce club for the first season. Jack is now a store manager but remembers a few things about cost analysis from CSUSB. In planning for next year, he wants to know how many orders will be needed each week for the club to break even, but first he must estimate the club’s fixed and variable costs. He has collected the following data over the club’s first season of operation:

Required (Make sure to show your work!):

Q1.   Estimate the cost equation using the high-low method.

Q2.   Did Stater Sister break even this season? Remember that each of the families paid a seasonal membership fee of $100.

Q3.   Assume that 500 families join the club next year (remember, this is an annual membership) and that prices and costs do not change. How many orders, on average, must Stater Sister receive each of 10 weeks next season to break even?

Series B bonds will be similar to Series A bonds. They pay $12 on June 3. There will be 100 bonds sold, and a Dutch auction will be used to determine the bond price. The bids will be ranked in order, and the price of the 100th bond will become the market-clearing price. Please submit your bid price and quantity you would like to purchase.

I'm not sure how to do this and was wondering what the process was!