1. You invested $5,000 in a mutual fund 27 months ago when the NAV of the fund was $30.00. You have not acquired or sold any shares since that time. Today, the NAV is $28.40. The fund charges a contingent deferred sales charge of 6, 5, 4, 3, 2, 2, and 1 percent if the shares are redeemed within the first 7 years, respectively. How much money will you receive if you redeem your shares today?
$4,748
$4,801
$4,450
$4,544
$4,383
2. A stock with a current price of $18 will either move up by a factor of 1.2 or down by a factor of .9 each period over the next two periods. The risk-free rate of interest is 4.5 percent. What is the current value of a call option with a strike price of $20?
$1.02
$1.08
$1.17
$1.21
$1.27