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- Robert Black and Carol Alvarez are vice presidents of Western Money Management andcodirectors of the company’s pension fund management division. A major new client, the California League ofCities, has requested that Western present an investment seminar to the mayors of the represented cities. Blackand Alvarez, who will make the presentation, have asked you to help them by answering the following questions:a. What are a bond’s key features?b. What are call provisions and sinking fund provisions? Do these provisions make bonds more or less risky?c. How is the value of any asset whose value is based on expected future cash flows determined?d. How is a bond’s value determined? What is the value of a 10-year, $1,000 par value bond with a 10%annual coupon if its required return is 10%?e. 1. What is the value of a 13% coupon bond that is otherwise identical to the bond described in part d?Would we now have a discount or a premium bond?2. What is the value of a 7% coupon bond with these…In the managed funds market, large institutional investors are positioned: A) in the retail market. B) in the wholesale market. C) somewhere between the retail and wholesale markets. D) in the same group as private client investors.In Growth Mutual Fund the companies make investment of their funds in a. Young and growing companies b. Government securities c. Already proven companies d. Finance companies
- The example of denomination intermediation function of mutual funds/unit trusts is investing short-term funds in off-balance sheet activities. investing in securities sold in high denomination that otherwise may be out of reach of retail investors. transforming short term sources of funds into long term investments by taking short term deposits to fund long term loans. transferring of funds from one generation to another.In Growth and Income Mutual Fund the companies make investment of their funds in a. Already proven companies b. Debentures of companies c. Finance companies d. Government securitiesMutual funds collect money from its _____ A) lenders B) shareholders C) banks D) loan sharks and invest those funds in _____. A) diversified portfolios of securities B) bank CDs C) precious metal and art
- Several market participants interact in developed markets to organize the exchange of funds from buyers to sellers. Such institutions as investment banks, commercial banks, financial services corporations, credit unions, pension funds, life insurance companies, mutual funds, exchange traded funds, hedge funds, and private equity companies play a key role in facilitating these transfers. Identify the financial institution based on each description given in the following table: Description Financial Institution They underwrite, distribute, and design investment securities for corporations to help them raise capital. Finacial Services Corporations,Commercial Banks, Investment Banks They are established by an employer to facilitate and organize employee retirement funds. They are asset pools that invest in securities that have a potential to give stable returns. Life Insurance, Credit Unions, Pension Funds With the use of advanced investment techniques, these…the federal fund is more effective than The banker’s acceptance in improving the economic growth. Assess the extent to which you agree with the statement with clarifying which one of these financial instruments you prefer to invest and why.Mutual funds are managed by an investment company. The owners of the mutual fund are different from the shareholders. The investment company owners do not, necessarily, invest in the mutual funds they are managing. Discuss whether this situation results in an incentive for the owners of the investment company to charge higher fees to the mutual funds investors.
- A _______________ is a private investment pool open only to wealthy or institutional investors that is exempt from SEC regulation and can therefore pursue more speculative policies than mutual funds. hedge fund unit investment trust money market fund mutual fundWhich of the following is an example of direct finance? Select one:investors buy shares in a mutual fundA pension fund manager buys a security in the secondary marketinvestors buy shares in a mutual fundNone of the answers are correctcompany buy security in a secondary marketMutual funds are managed by _____ organized much like any other business. A) brokers B) market makers C) investment companies
