Please answer numbers 4, 5 and 6

4. Assume that the call option of the asset stated below has a strike price of P100 expires in 4 months from now with one-period risk free of 5%. Compute for the call option price. ASSET G . PRICE P135 80 5. The Acme Insurance Company purchased a 5-year bond whose interest rate floats with LIBOR. Specifically, the interest rate in a given year is equal to LIBOR plus 200 basis points. At the same time the insurance company purchases this bond, it enters into a floor agreement with the Bear Stearns in which the notional amount is P35 million with a strike price of 6%. The premium Acme Insurance Company agrees to pay Bear Stearns each year is P300,000. a) Suppose at the time that it is necessary to determine whether a payment must be made by Bear Stearns, LIBOR is 9%. How much must Bear Stearns pay to Acme Insurance Company? b) Suppose at the time that it is necessary to determine whether a payment must be made by Bear Stearns, LIBOR is 3%. How much Bear Stearns pay to Acme Insurance Company? 6. Calculate the EIR, if the trade credit under each of the following: a) 2/10, n/60 b) 2/10, n/60 4. Assume that the call option of the asset stated below has a strike price of P100 expires in 4 months from now with one-period risk free of 5%. Compute for the call option price. ASSET G . PRICE P135 80 5. The Acme Insurance Company purchased a 5-year bond whose interest rate floats with LIBOR. Specifically, the interest rate in a given year is equal to LIBOR plus 200 basis points. At the same time the insurance company purchases this bond, it enters into a floor agreement with the Bear Stearns in which the notional amount is P35 million with a strike price of 6%. The premium Acme Insurance Company agrees to pay Bear Stearns each year is P300,000. a) Suppose at the time that it is necessary to determine whether a payment must be made by Bear Stearns, LIBOR is 9%. How much must Bear Stearns pay to Acme Insurance Company? b) Suppose at the time that it is necessary to determine whether a payment must be made by Bear Stearns, LIBOR is 3%. How much Bear Stearns pay to Acme Insurance Company? 6. Calculate the EIR, if the trade credit under each of the following: a) 2/10, n/60 b) 2/10, n/60