Question: 1An interest rate is 6% per annum with continuous compounding. What is the equivalent rate with semiannual compounding? A)5.99% B)6.29% C)6.09% D)6.19% 2.Which of the

1An interest rate is 6% per annum with continuous compounding. What is the equivalent rate with semiannual compounding?

A)5.99%

B)6.29%

C)6.09%

D)6.19%

2.Which of the following is NOT a theory of the term structure

A)Expectations theory

B)Liquidity preference theory

C)Maturity preference theory

D)Market segmentation theory

3.Suppose that a July put option on a stock with a strike price of $50 costs $2.50 and is held until July. At maturity of the option, the stock price sits at $49. As a result, the holder of this option will

A)exercise this option and make a loss of $1.5

b)not exercise this option and make a profit of $2.5

c)not exercise this option and make no loss or profit

d)exercise this option and make a profit of $1.5

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