10:40BackGFinance Millionaire.docxfor-smarter-investingIndex Fund InvestingLet's continue with some more specifics :)Let's pretend that at the age of twenty we start to invest in IndexFunds which is pretty much "buying the entire stock market."Think of it as a giant mutual fund.Let's pretend that in our twenties we invest one hundred dollarsa month into an index fund that pays us 8% APR compoundedmonthly. Let's pretend that we make this a habit we do it for tenyears.Then in our thirties we invest two hundred dollars a month. Let'spretend that we make this a habit we do it for ten years.Then in our fourties we invest three hundred dollars a month.Let's pretend that we make this a habit we do it for ten years.Then in our fifties we invest four hundred dollars a month. Let'spretend that we make this a habit we do it for ten years.And finally, in our sixties we invest five hundred dollars amonth. Let's pretend that we make this a habit we do it for tenyears.Use a Sheets or Excel document. Screenshot the appropriatesupport into this document and answer the questions in thisdocument. OR use your algebra muscles as support if you wouldrather.1. How much money did we invest in total?2. How much money will we have in total at the end of all ofour investing?3. How much interest did we earn by investing in these indexfunds?Annuity InvestingNow let's pretend that we buy an annuity at the age of 70 withhow much money we have in total from our index fundinvesting. Use the number you got above in #2 (hint: it shouldbe somewhere between one and two million dollars btw).Let's buy a twenty year annuity that pays us 5% APRcompounded monthly,4. How much money will we get paid each month?5. How much money in total will we get paid back?6. How much interest will we make from the annuity?Let's put both of these investments together in our mindsTo clarify, we invested in index funds and made money. Thenwe bought an annuity and made more money.7. In total how much money do we end up investing out of ourown pockets (not investing interest from the bank, but justour own money that we personally saved from 20s through60s)?8. How much money in total do we get back from theannuity?998Dashboard CalendarDE11To DoA.. LTENotificationsInbox

Future value of annuity Annuity is a series of equal payment at equal interval over a specified…

Index Fund Investing Let's continue with some more specifics :) Let's pretend that at the age of twenty we start to invest in Index Funds which is pretty much "buying the entire stock market." Think of it as a giant mutual fund. Let's pretend that in our twenties we invest one hundred dollars a month into an index fund that pays us 8% APR compounded monthly. Let's pretend that we make this a habit we do it for ten years. Then in our thirties we invest two hundred dollars a month. Let's

Index Fund Investing Let's continue with some more specifics :) Let's pretend that at the age of twenty we start to invest in Index Funds which is pretty much "buying the entire stock market." Think of it as a giant mutual fund. Let's pretend that in our twenties we invest one hundred dollars a month into an index fund that pays us 8% APR compounded monthly. Let's pretend that we make this a habit we do it for ten years. Then in our thirties we invest two hundred dollars a month. Let's

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

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 7FPE

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A good stock-based mutual fund should earn at least 10% per year over a long period of time. Consider the case of Barney and Lynn, who were overheard gloating (for all to hear) about how well they had done with their mutual fund investment. “We turned a $25,000 investment of money in 1982 into $100,000 in 2007.” Solve, a. What return (interest rate) did they really earn on their investment? Should they have been bragging about how investment-savvy they were? b. Instead, if $1,000 had been invested each year for 25 years to accumulate $100,000, what return did Barney and Lynn earn?
A good stock-based mutual fund should earn at least 10% per year over a long period of time. Consider the case of Barney and Lynn, who were overheard gloating (for all to hear) about how well they had done with their mutual fund investment. “We turned a $25,000 investment of money in 1982 into $100,000 in 2007.” Solve, a. What return (interest rate) did they really earn on their investment? Should they have been bragging about how investment-savvy they were?
A good stockdash–based mutual fund should earn at least 5% per year over a long period of time. Consider the case of Barney and Lynn, who were overheard gloating (for all to hear) about how well they had done with their mutual fund investment." We turned a $32,500 investment of money in 1982 into $150,000 in 2007." a. What return (interest rate) did they really earn on their investment? Should they have been bragging about how investment-savvy they were? b. Instead, if $1,500 had been invested each year for 25 years to accumulate $150,000, what return did Barney and Lynn earn?
2. Suppose you are the money manager of a $4.96 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 580,000 1.50 B 800,000 (0.50) C 980,000 1.25 D 2,600,000 0.75 If the market's required rate of return is 11% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
H5. Consider a hedge fund with $400 million in assets, $60 million in debt, and 16 million shares at the start of the year and with $500 million in assets, $40 million in debt, and 20 million shares at the end of the year. During the year, investors have received an income dividend of $.75 per share. Assuming that the total expense ratio is 2.75%, what is the rate of return on the fund? Multiple Choice 8.52% 6.45% 9.46% 8.95%
Mutual funds charge their clients an “expense ratio” for managing yourfunds. A 1.5% annual expense ratio is common in the mutual fund industry.Suppose you invest $100,000 into a fund with a 1.5% expense ratio and leave it invested for 40 years. If you have a personal MARR of 6% per year, your future worth (less the expense ratio) will be $100,000 (1 – 0.015)(F/P, 6%, 40) = 1,013,141. If you invest instead in an exchange traded fund (ETF) that has an expense ratio of 0.1% per year, you will end up with F = $100,000 (1 – 0.001)(F/P, 6%, 40) = $1,027,541 which is $14,400 more than the mutual fund. Moral: Be mindful of expenses being levied on your savings vehicles (e.g., an individual retirement account) for retirement savings. How much will you have in 40 years if the expense ratio is 3.5% per year?
City Street Fund has a portfolio of $420 million and liabilities of $30 million. Required:a. If there are 30 million shares outstanding, what is the net asset value? b-1. If a large investor redeems 3 million shares, what happens to the portfolio value? (Enter your answer in dollars not in millions.)
1. A mutual fund with K100 million in assets at the start of the year and with 10 million shares outstanding invests in a portfolio of stocks that provides no income but increases in value by 10 %. Required: What is the rate of return in the fund? If a fund has an initial NAV of K20 at the start of the month makes income distributions K0.15 and capital gain distributions of K0. 05 and ends the month with NAV of K20.10. Calculate the monthly rate of return. 2. An equity fund has a front end load of 4 % and special fees of 0.5% annually as well as back-end fees that start at 5 % and fall by 1 % for each full year the investor holds the portfolio until the fifth year. Assuming the rate of return on the fund net of operating expenses is 10 % annually, what will be the value of a K10 000 investment in the equity fund shares if the shares are sold after 1 year, 4 years and 10 years?
1)The twenty-first century closed-end fund has GHS350 million in securities, GHS8 million in liabilities and 20 million in shares outstanding. It trades at a 10% discount from net asset value (NAV) a)What is the net asset value of the fund? b)What is the current price of the fund? c)Suggest two reasons why the fund may be trading at a discount from net asset value. 2)The new pioneer closed-fund has GHS520 million in securities, GHS5 in liabilities, and 10 million shares outstanding. It trades at a 5% premium above its net asset value (NAV). a)What is the net asset value of the fund? b)What is the current price of the fund? c)Why might a fund trade at a premium above its net asset value? 3)In problem 2, if new pioneer converted to an open-end fund trading at its net asset value with a 6% load (commission), what would its purchase price be? 4)In problem 2, if new pioneer converted to an open end fund and traded at GHS1.50, would it be a load or no load fund? 5)An…
Consider a mutual fund(ex. Contrafund) It has $10,000 in assets (stocks) and 250 shares are owned by people like you and I. Which one of the following is false?. The NAV = $40/share but will change if the market price of the stocks change If a new customer buys 1 share the NAV will change (up or down) If a new customer buys 1 share the PM will have more money to buy securities If an existing customer sells a share the NAV will not change When an existing customer sells their share(s), by law the Fund has to buy those shares
1)The twenty-first century closed-end fund has GHS350 million in securities, GHS8 million in liabilities and 20 million in shares outstanding. It trades at a 10% discount from net asset value (NAV) a)What is the net asset value of the fund? b)What is the current price of the fund? c)Suggest two reasons why the fund may be trading at a discount from net asset value.
1. A fund is set up to charge a load. Its net asset value is P16.50 and its offer price is P17.30. A. Assume the fund increased in value by .30 the first month after you purchased 100 shares. What is the total gain or loss? Compare the total current value with the total purchase amount. B. By what percentage would the net asset value of the shares have to increase for you to break even?