Consider the following security information for 4 securities making up an index: Table 3

Stock Shares Price_t Price_t+1

A 1,000 $48 $53

B 5,000 $27 $30

C 3,000 $9 $19

What is the new index value at t=1 using the market value weighted approach assuming the base value is set to 100? What is the return for the price-weighted index.

Based on Table 1, which option contract will have the highest premium?

Option Expiration Date

A 1/14/2011

B 2/15/2011

C 12/14/2010

Assuming the option is a call option which option has the highest premium based on Table 2? Assuming the option is a put option which option has the highest premium?

Option Strike Price

A $60

B $62

C $64