Question 1)401Kwhere m= | +BCE) =d (),12.tm-1la) Mutual fund is earning an APR of9%. (r=.09).What monthly deposit d is neededfor a balance 'of 2million dollarsin 40years? Show work.b) Assume uour mutual fund is eaningan APR of 107. (r=10).What monthly deposit d is neededfor a balance of 2million dollars in4Ouears?C) Assume your mutual fund is earningan APR of 11% (F=.l1).What monthly deposit is needed for abalance of 2million dollars in 40uears?

A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Question 1) 니01K 12.t where m= 1+7 B(t)=d(m-1 %3D a) Mutual fund is earning an APR of 9%.(r=.09). What monthly deposit d is necded for a balance 'of 2million dollars in 40uears? Show work. b) Assume your mutual fund is eamnina an APR of 107. (r=10). What montnly deposit d is needed for a balance of 2million dollars in 4Ouears? C) Assume your mutual find is earning an APR of 11%(F=.11). What monthly deposit is needed fora balance of 2million dollars in 40uears

Question 1) 니01K 12.t where m= 1+7 B(t)=d(m-1 %3D a) Mutual fund is earning an APR of 9%.(r=.09). What monthly deposit d is necded for a balance 'of 2million dollars in 40uears? Show work. b) Assume your mutual fund is eamnina an APR of 107. (r=10). What montnly deposit d is needed for a balance of 2million dollars in 4Ouears? C) Assume your mutual find is earning an APR of 11%(F=.11). What monthly deposit is needed fora balance of 2million dollars in 40uears

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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Q1. What is a mutual fund? In what sense is it a financial institution?. Q2. How is the net asset value (NAV) of a mutual fund determined? What is meant by the term marked-to-market daily? Q3. An investor purchases a mutual fund for $50. The fund pays dividends of $1.50, distributes a capital gain $2, and charges a fee of $2 when the fund is sold on year for $52.50. What is the net rate of return from this insurance? Formula for Question 3: Net gain = Dividend + capital gain + profit from fund sold – fee
Suppose that you initially invested $10,000 in the Stivers mutual fund and $5,000 in theTrippi mutual fund. The value of each investment at the end of each subsequent year isprovided in the table:Year Stivers ($) Trippi ($)1 11,000 5,6002 12,000 6,3003 13,000 6,9004 14,000 7,6005 15,000 8,5006 16,000 9,2007 17,000 9,9008 18,000 10,600Which of the two mutual funds performed better over this time period?
If a mutual fund's net asset value is $23.30 and the fund sells its shares for $25.00, what is the load fee as a percentage of the net asset value? Round your answer to two decimal places.....%
You have $15,000 to invest in a mutual fund. You choose a fund with a 3.5 percent front load, a 1.75 percent management fee, and a 0.5 percent 12b-1 fee. Assume, for simplicity, that the management and 12b-1 fees are charged on year-end assets. The gross annual return on the fund's shares was 12.50 percent. What was your net annual rate of return to the nearest basis point? a. 9.97% b. 6.12% c. 9.25% d. 5.42% e. 8.56%
You have $16,000 to invest in a mutual fund with an NAV = $45. You choose a fund with a 4 percent front load, a 1 percent management fee, and a 0.25 percent 12b-1 fee. Assume that the management and 12b-1 fees are charged on year-end assets. The gross annual return on the fund's shares was 9 percent. What was your net annual rate of return to the nearest basis point? a. 3.33% b. 7.64% c. 6.25% d. 4.52% e. 4.64%
ASAP 65.You invest in a mutual fund that charges a 3% front-end load, 1% total annual fees and a 2% back-end load, which decreases .5% per year. How much will you pay in fees on a $10,000 investment that does not grow if you cash out after 3 years of no gain? $635 $219 $553 $103 66.The five-star Morningstar rating implies superior returns compared to risk. lowest turnover compared to peers. superior risk compared to return. lowest fees compared to peers.
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?
The Wildwood Fund sells Class A shares with a front-end load of 3.5% and annual operating expenses of 1%. Class B Shares have a 12b-1 fees of 1.5% annually and annual operating expenses of 0.75%. You plan to sell the fund after 7 years. Assume a 10% annual return. Assume that your initial investment is $100. What is Class A's ending value? Group of answer choices 163.32 177.66 176.41 181.46 152.14
Mutual funds can effectively charge sales fees in one of three ways: front-end load fees, 12b-1 (annual) fees, or deferred (back-end) load fees. Assume that the SAS Fund offers its investors the choice of the following sales fee arrangements: (1) a 3 percent front-end load, (2) a 0.50 percent annual deduction, or (3) a 2 percent back-end load, paid at the liquidation of the investor's position. Also, assume that SAS Fund averages NAV growth of 12 percent per year. If you start with $100,000 in investment capital, calculate what an investment in SAS would be worth in three years under each of the proposed sales fee schemes. Which scheme would you choose? If your investment horizon were 10 years, would your answer in part (a) change? Demonstrate.
The Wildwood Fund sells Class A shares with a front-end load of 3.5% and annual operating expenses of 1%. Class B Shares have a 12b-1 fees of 1.5% annually and annual operating expenses of 0.75%. You plan to sell the fund after 7 years. Assume a 10% annual return. Assume that your initial investment is $100. What is Class B's ending value? Group of answer choices 179.57 156.09 165.94 168.62 146.69
At age 28 you invest P 25,000 into a mutual fund. If the fund averages a 7% annual return, your investment is worth how much at age 60? a) P190,306 b) P1,449,661 c) P1,266,221 d) P217,882
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?