Chapter 2 EOC Assigned Problems 15. An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9% yields, what must municipals offer for the investor to prefer them to...

Answer the questions in attached file


Chapter 2 EOC Assigned Problems 15. An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9% yields, what must municipals offer for the investor to prefer them to corporate bonds? (LO 2-1) 17. Turn back to Figure 2.3 and look at the Treasury bond maturing in February 2039.  (LO 2-1) a. How much would you have to pay to purchase one of these bonds? b. What is its coupon rate? c. What is the current yield (i.e., coupon income as a fraction of bond price) of the bond? Fig. 2.3 27. What options position is associated with: (LO 2-3) a. The right to buy an asset at a specified price? b. The right to sell an asset at a specified price? c. The obligation to buy an asset at a specified price? d. The obligation to sell an asset at a specified price? 28. Why do call options with exercise prices higher than the price of the underlying stock sell for positive prices? (LO 2-3) 29. Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and maturities of six months. (LO 2-3) a. What will be the profit to an investor who buys the call for $4 in the following scenarios for stock prices in six months? (i) $40; (ii) $45; (iii) $50; (iv) $55; (v) $60. b. What will be the profit in each scenario to an investor who buys the put for $6?  Web Master #2 Not all stock market indexes are created equal. Different methods are used to calculate various indexes, and different indexes will yield different assessments of “market performance.” Using one of the following data sources or a different one of your liking, retrieve the stock price for five different firms on the first and last trading days of the previous month. · www.nasdaq.com—Get a quote; then select Charts and specify one month. When the chart appears, click on a data point to display the underlying data. · www.bloomberg.com—Get a quote; then plot the chart; next, use the moving line to see the closing price today and one month ago. · finance.yahoo.com—Get a quote; then click on Historical Data and specify a date range. a. Compute the monthly return on a price-weighted index of the five stocks. b. Compute the monthly return on a value-weighted index of the five stocks. c. Compare the two returns and explain their differences. Explain how you would interpret each measure.