1. Assume the average market return over the next 50 years is expected to be 8.2%. If an investor contributes $13 thousand into an investment account today, pays 1.6% of assets under management for various fund and advisor fees, and waits for 50 years, what percentage of his final wealth has he sacrificed in fees?
Enter answer in percents.
2. A call option on the SGD with a strike price of 0.77 USD/SGD and a maturity of 6 months has a premium bid price of 0.06 USD, and a 1penny bid-ask spread. If you sell these options today on 10,000 SGD, and at maturity the SGD is quoted at bid price of 0.84 USD/SGD, with a 1 penny bid-ask spread, what is your net profit on this position?
Note: pay careful attention to which side of the quote you will be trading with at each step.