1 Which of the following investors of a segregated funds contract will NOT benefit from the contract'smaturity guarantee?ZnFadkJEYm91SVgxL1h6YUR1CUU5Zz09>b.a. O Craig, whose contract is nearing maturity but the fund's market value had reduced drasticallyMegan, who decided to reset her segregated funds contract which is maturing in two yearsAlan, who is surrendering his segregated funds contract which he purchased five years agod. O Zoey, who withdrew some funds from her contract on which her spouse is the beneficiaryZnFadkJEYm91SVgxL1h6YUR1cUU5Zz09 >C.

In segregated funds, investors have been given guarantee of 75% or 100%(in some contracts) of…

Answered: 1 Which of the following investors of a…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 2FPE

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3. Consider an individual who has the possibility of investing an amount t in period 1 in a fund that gives an amount s in period 2. (a) If the interest rate r is positive, what would be the smallest s so that it is optimal for the consumer to accept that investment? (b) If t = 100 and s = 115, what is the highest interest rate at which the individual is willing to invest in that fund?
An investment advisor currently has two types of investments available for clients: a conservative investment A that pays 8% per year and investment B of higher risk that pays 14%. Clients may divide their investments between the two to achieve any total return desired between 8% and 14%. However, the higher the desired return, the higher the risk. How should each client listed in the table invest to achieve the desired return? Client 1 Client 2 Client 3 k $21000 $40000 $31000 k, Annual Return Desired $2460 $3860 $3740 k2 Total Investment How much money should Client 1 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B: How much money should Client 2 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B: How much money should Client 3 invest in each account to achieved the desired return? Amount in investment A: Amount in investment B:
3. Explain different types of money market instruments. In each of the below cases, which money market instruments would you recommend and why? a. A mutual fund manager has INR 450 million of cash, which he needs to park for a period of less than 180 days, where he will move this to equity b. An oil refining company wishes to borrow INR 1500 million for a period of 90 days to fund its settlement of invoices
- F7 Z (Related to Checkpoint 5.6) (Solving for ) You are considering investing in a security that will pay you $2,000 in 28 years. a. If the appropriate discount rate is 12 percent, what is the present value of this investment? b. Assume these investments sell for $853 in return for which you receive $2,000 in 28 years. What is the rate of return investors earn on this investment if they buy it for $853? a. If the appropriate discount rate is 12 percent, the present value of this investment is $. (Round to the nearest cent.) b. The rate of return investors can earn on this investment if they buy it for $853 is %. (Round to two decimal places.) @ 2 F2 W S X command # 3 80 F3 E D $ 4 C F4 R F % 5 V FS T G A 6 MacBook Air B A F6 Y & 7 H dd F7 U N * 20 8 J DII FB 1 M ( 9 K MOSISO DD F9 ER O V- 1 H O L 4 F10 P > command .... . e P11 + I { 1 [ ? option #1 1 Ne 41) F12 } 1 "AVG and c delete
Question 1) 니01K 12.t where m=1+7 B(t) =d() 12 m-l a) Mutual fund is carning an APR of What monthly deposit d is needed for a balnce 'of 2million dollars in 40years? Show work.
Suppose Vanguard offers a market portfolio with positive expected return. Warren Buffett signed a contract with his two successors. The contract defines that the bonus of his successors in 2013 is determined by $0.1 Billion times the difference between their portfolio return and Vanguard’s market portfolio return in that same year. Question 31 What would be a better contract if CAPM is the correct model? Bonus can only be positive when the CAPM alpha is positive Bonus should not be correlated with the CAPM alpha Bonus can only be positive when the CAPM alpha is negative Bonus should be determined by the CAPM beta instead
4. Suppose a (very skilled) fund manager earns a safe return of 0.7% pertrading day. There are 252 trading days per year. (a) What will be your annualized holding period return on $100 invested in the fundif the manager allows you to reinvest in her fund the 0.7% you earn each day? (b) What will be your annualized holding period return assuming the manager putsall of your daily earnings into a zero-interest-bearing checking account and paysyou everything earned at the end of the year?
Suppose that a mutual fund agent approaches you and promote a fund which allows you to withdraw money from your Employment Provident Fund (EPF) to invest. From the analysis of the agent, the fund expected to pay up to 11% return, and you know that EPF paid an average 6% return and treasury’s return fixed at 2.75%. Based on the discussion in this chapter and in your opinion, are you going to take the investment? Justify your answer
An investor considers two mutual funds. Based on past experience, the first fund has an expected return of 0.08 and a standard deviation of 0.05. The second fund has an expected return of 0.07 and a standard deviation of 0.06. There is no reason to assume that future performance of these funds will differ from past performance. However, the second fund has a guarantee attached that the return in any year will not be negative.RequiredA. Which fund would a rational investor be likely to buy according to single-person decision theory?B. The investor buys the second fund. Use prospect theory to explain why.
Y2 .You invest $100,000 in a hedge fund with a 2/20 fee structure. For the next 3 years, the hedge fund earns annual returns of 25.93%, -13.03%, and 75.34%. You make no withdrawals from the fund. Whenever fees are due, you write a check for that amount to the fund (such that the fund doesn't deduct the fees from your portfolio value). The fund's fee structure has a high watermark feature. What are the total fees you pay over the course of the three years? Enter a number with two decimal points. Answer the question in dollar amount, i.e., if the answer is $20, enter 20.00.
You are considering purchasing a no - load mutual fund with an operating expense of .4% and a 12 b-1 expense of .25% . You are also considering purchasing a CD paying 3.0% per year. What minimum annual rate of return must the fund earn to make you better off in the fund versus the CD Group of answer choices 3.65 % 3.0 % 2.35% 3.4%
(b) Despite the world's promising economic condition, she believes that the domestic market is still unstable and anticipates it to continue a downtrend till mid of year 2020. The investment analyst informed her that the investment fund in the following: Khadijah was the top fund manager who manages an equity portfolio at Bank Islam Berhad. Number of Share Economic Condition Price per Unit Recession Beta RM1,228.88 18,080 16,070 9,600 1.59 Normal RM838.50 2.01 Вoom RM450.89 0.65 The current Treasury Bill is 9.2 percent and market portfolio is 13.7 percent. Based on the information above: i. Calculate the required rate of return. ii. Khadijah has analyzed that there are several risk factors that drive the return on the share market as follows: Risk Factor Investment Pandemic 7.8 Oil Price GDP Inflation Market return (%) 4.43 5.2 5.5 Beta 1.21 0.9 1.87 2.6 The risk-free rate is 3.98 percent, calculate the required rate of return on the share.

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