A Mutual Fund Had Average Daily Assets of $4

question 4

Multiple Choice

A mutual fund had average daily assets of $4.0 billion in 2009.The fund sold $1.5 billion worth of stock and purchased $1.6 billion worth of stock during the year.The fund's turnover ratio is ____________.

• A)37.5%
• B)22%
• C)15%
• D)45%
• E)20%

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Definitions:

Strike Price

The predetermined price at which an option's holder has the right to purchase (for a call option) or sell (for a put option) the underlying asset.

Option

An option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified timeframe.

European Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a certain asset at a specified price (strike price) on a specified date.