Synthetic Stock Index Fund and Synthetic Cash

CFA Level III Derivatives
#1

I looked at the CFA reading, Schweser and previous answers to this question on this forum and none of them show the whole process of mathematically arriving at a synthetic stock index fund and synthetic cash, i.e. HOW you are left with stock returns and dividends in the former case and RF return in the latter. The internet hasn’t been much help either.

Does anyone have a link or know a place where they show the longhand for working out the synthetic index fund and cash?

Thanks

#2

Synthetic Index funds provide exposures to the equity markets and replicate the return of a benchmark index. The use of seperate country funds within a global synthetic index fund gives investors considerable flexibility in structuring their international portfolios.

#3

I wrote an article on the synthetics – cash, equity, and fixed income – that may be of some help: http://financialexamhelp123.com/the-synthetics-cash-equity-and-fixed-income/. In there you’ll find links to a few other articles that will help with the background: