ean put with a high strike price. Question 3 (1 point) Agnes advises clients on option strategies related to interest rates and bonds. She institutes a hedge of a $5 million position in bonds using calls. The calls each cover $100,000 par value of bonds, have a delta of 0.4, and are out-of-the money. Referring back to Agnes' original hedge position, after two days have passed, the price of the underlying bond has increased by 1 percent due to a shift in the yield curve. The call hedge should be: Left alone; the price of the underlying will respond to the yield curve shift in a similar manner to the portfolio. Increased because gamma has increased. Decreased because delta has increased. Increased because delta has decreased. Question 4 (1 point) Saved The current spot rate between the Japanese Yen and the U.S. dollar is Y124.56/$. If the risk free rate in Japan is 2.6% and in the U.S. its 6.4%, what should the 6-month