A pension fund manager decides to invest a total of at most $30 million in US treausry bonds paying 6% annual intrest and in mutual funds paying 9% annual interest. He plants to invest at least $5 million in bonds and at least $15 million in mutual funds. Bobds have a initial fee of $100 per million dollars while the fee for mutual funds is $200 per million. the fund manager is allowed to spend no more than $5000 on fees. 1.How much should be invested in eacg ot maximise interest A-Amount to be invested in treasury bonds B-Amount that should be invested in mutual funds C-What is the maximum annual interrst

A pension fund manager decides to invest a total of at most $30 million in US treausry bonds paying 6% annual intrest and in mutual funds paying 9% annual interest. He plants to invest at least $5 million in bonds and at least $15 million in mutual funds. Bobds have a initial fee of $100 per million dollars while the fee for mutual funds is $200 per million. the fund manager is allowed to spend no more than $5000 on fees. 1.How much should be invested in eacg ot maximise interest A-Amount to be invested in treasury bonds B-Amount that should be invested in mutual funds C-What is the maximum annual interrst

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter2: Descriptive Statistics

Section: Chapter Questions

Problem 17P: Suppose that you initially invested 10,000 in the Stivers mutual fund and 5,000 in the Trippi mutual...

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Suppose that you initially invested 10,000 in the Stivers mutual fund and 5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table: Which of the two mutual funds performed better over this time period?
Richard invested $750,000 in a hedge fund with a 2/20 fee structure. The fund had a total of $15 million of assets under management and it returned 12% and 19% in the first and second years, respectively. Assume that management fees are paid at the beginning of each year and performance fees are paid at the end of each year in which they are applicable. How much will Richard pay in performance fees for the first two years, respectively?
A mutual fund’s net asset value is $39.30, but the fund charges a 3 percent load fee (front- loaded) and an exit fee of 1 percent (if redeemed in 6 months) of net asset value. An individual client purchases 10 shares of the mutual fund on Jan 5 of year 20X1. During the year 20X1, the fund distributes $3.45 capital gain and $0.75 dividend income. The net asset value rises to $42.12 on Jan 5 of year 20X2 and the investor redeems the shares. a) What is the percentage return the fund can report that was achieved by its portfolio managers? b) What is the percentage return the individual earned on the investment? Why is this answer different from the answer in part (a)?
Suppose an individual invests £25,000 in a load mutual fund. The load fund entails an up-front commission charge of 4 percent of the amount invested and is deducted upfront. In addition, annual fund operating expenses are 0.85 percent, which is charged on the average net asset value invested in the fund. The return on this fund is 6 percent each year paid on the last day of the year. What would be the investor’s return on this fund after one year?
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.
Cognana fund has 9.8 million shares outstanding. The fund’s portfolio is now valued at $500 million, and the fund owes $16 million to the fund advisors and $8 million against rent and wages. How would you calculate the net asset value of the fund?
Consider a mutual fund that manages a portfolio of securities worth $120 million.Suppose the fund owes $4 million to its investment advisers and owes another $1million for rent, wages due, and miscellaneous expenses.The fund has 5 million shareholders.What is the Net Asset Value?
Consider a mutual fund that manages a portfolio of securities worth Php240 million. Suppose the fund owes Php8 million to its investment advisers and owes another Php2 million for rent, wages due, and miscellaneous expenses. The fund has 10 million shareholders. What is the net asset value per share?
An investor is considering two mutual funds. Fund A has a 5.75 percent front-end load and a 1.25 percent expense ratio. Fund B is no-load but has a 2.25 percent expense ratio. If the investor plans on being in either fund for six years, which should they choose given that they have $16,000 to invest and both funds have gross returns of 12 percent per year? Fees are applied at each year-end to year-end asset values, but the load is taken out up front only once.
A hedge fund with $25 million of assets under management has a standard 2/20 fee structure and earns 14 percent this year. Assume that management fees are paid at the beginning of each year and performance fees are paid at the end of each year. Assume that the fund’s fee structure also contains a high-water mark provision. What is the management fee collected by the fund managers? What is the performance fee collected by the fund managers? What is the investor’s net return?
The Jeffersons want to start investing $600 monthly to achieve their stated short- and long-term objectives. Which of the following monthly investments is most appropriate for them at this time and why? Provide two pros for the investment allocation you selected and one con for each of the investment allocations you did not select. $600 in a Roth IRA account for Jaylen, allocated as $300 in large cap domestic growth stocks, and $300 in an international growth fund $600 in a AAA-rated municipal bond fund $600 in a high yield, long-term bond fund $100 in a money market account, and $500 in a Roth IRA global balanced mutual fund
A pension fund portfolio begins with $500,000 and earns 15% the first year and 10% the second year. At the beginning of the second year, the sponsor contributes another $500,000. What were the time-weighted and dollar-weighted rates of return?