2.

a.) Create a value (VW) and price weighted index (PW) using the three stocks. Assume each stock will be in the index and calculate the return of each from t = 1 to t = 2. (There should be 2 answers here. b. What would be the new divisor for the price weighted index at time period 0 if stock C had a 2 for 1 stock split c. What is the holding period return for each stock from time 0 to time 2. Assume Stock B has a $5 dividend and the other stocks do not. (Ignore the number of shares for this question only)

1. What is the appeal of municipal bonds for high income investors, relative to those in lower tax brackets? 2. Use the chart below to answer the following questions. Stock A T=0 Price Quantity 90 100 45 200 30 200 T=1 Price Quantity 95 100 50 200 30 200 T=2 Price Quantity 98 100 50 200 10 400 B a. I Create a value (VW) and price weighted index (PW) using the three stocks. Assume each stock will be in the index and calculate the return of each from t=1 to t=2. (There should be 2 answers here. b. What would be the new divisor for the price weighted index at time period 0 if stock C had a 2 for 1 stock split What is the holding period return for each stock from time 0 to time 2. Assume Stock B has a $5 dividend and the other stocks do not. (Ignore the number of shares for this question only) 3. If an investor is in a 25% tax bracket and corporate bonds are yielding 10.5%, what must a municipal bond yield to be the equivalent to the corporate bond. c. 4. Use the table below to answer the following questions for a February call option with a strike of $95