Question

xercise price asser. If the breakeven point for this hedge islat an asset price of a expirationjwhatis the value of the American put at the time of purchase? (5) A stock index futures contract matures in one year. The cash index currently has a level of $1,000 with a dividend yield of 2 %, and the interest rate is 5%. What does the spot-future parity imply a cash index level of? '6) The Star Income Fund's average daily total assets were $100 million for the year just completed. Its stocks purchases for the year were $20 million, while its sales were $12.5 million. What was its turnover?

Answer 1

Question 6

Turnover of a Fund is defined by the sum of its total sales and purchases divided by the assets held by it.

B4 .: X fx =(B1+B2)/B3 А 1 Stock Purchases 2 Stock sales 3 Average total assets 4 Turnover В 20 12.5 100 =(B1+B2)/B3

'

B4 1 Stock Purchases 2 Stock sales 3 Average total assets 4 Turnover B 20 12.5 100 0.325

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