Question 2 Suppose you had a 6 percent coupon, 1,000 par bond that matures in three years. Assume that the bond's Yield To Maturity (YTM) is 10...

Question 2

Suppose you had a 6 percent coupon, £1,000 par bond that matures in three years. Assume that the bond's Yield To Maturity (YTM) is 10 percent and that the interest is paid semi-annually. Calculate this bond's duration. I need detail answer this question and formula for each answer

Question 2

You speculate that prices will not move much. You have the following information:

Stock Price = Exercise Price = £60

Call option = £4

Put option = £3

    i)       What strategy should you adopt? What is the name of your strategy combination?

   ii)       What is the maximum loss?

  iii)       What are the breakeven points of the position?