Question

32 33 please!!!

ou sell (write) four call option contracts with a strike price of $27.50 and an option remium of $0.66. At expiration, the stock was selling for $26.90 a share. What is the total profit or loss on your option position? 2) You purchased three put option contracts with a strike price of $30 and a premium of $o.90 At expiration, the stock was selling for $24.80 a share. What is the total profit or loss on your option position? 33) The European Growth Fund has $820 million in assets and $76,000 in liabilities -end load. What is the 30.5 million shares outstanding. The fund charges a 4.4 percent front offering price? million of new assets. The average daily assets of the fund were $248 million. What is th turnover rate? 34) The Aggressive Eastern Fund sold $167 million of assets during the year and purchased $1

Answer 1

32)Answer :

Given :

Strike Price - $30

Premium - $0.90

Stock Price Expiration - $24.80

Number of Contracts - 3 ( i.e 100 shares makes 1 contract )

Put Option Profit / Loss Formula :

Breakeven Point - Stock Price Expiration

So. First, we need to find Breakeven Point from the given information

Breakeven Stock Price = Put Option Strike Price - Premium Paid

= $30 - $0.90

=$29.1

Now we will find out Put Option Profit/ loss = $29.1 - $24.80

= $4.3 per share

As , 1 contract is 100 shares and total 3 contracts were purchased i.e 100 * 3 = 300

So the total Profit will be $4.3 * 300 = $1290 profit

33)Answer :

Given :

Assets: $820 million

Liabilities - $76000

Shares Outstanding = 30.5 million

Fund Charges =4.4% front end Load

So, to find Offer Price we will put all the information :

Offer Price = [($820,000,000 - $76000) / 30,500,000] / (1 - 0.044)

Offer Price = $28.12