OB*BookProblem Walk ThroughSuppose you are the money manager of a $4.24 mbon investment fund the fund consists of four stocks with the following investments and betaStockBeta1.50(0.00)1.258.75WInvestment$320,000500,0001.320,0001,000,000CDthe market's required rate of retums 11% and the risk free rate is what is the fund's requered rate of retum De not found intermedate caldabone Round your answer to two decimal place

StockInvestmentBetaA$520,000.001.5B$500,000.00-0.56C$1,320,000.001.2D$1,900,000.000.75total$4,240,00…

Suppose you are the money manager of a $4.24 mon envenent fund the fund counts of four stocks with the flowing investments and be evestment A $320,000 THE 500,000 L3000 1,900,000 the funds reed rate of reta Do not under an hound our answer to two decinal place the market'ered rate of return SIDE Mock C Beta 1.30 (GM) Las 8.75

Suppose you are the money manager of a $4.24 mon envenent fund the fund counts of four stocks with the flowing investments and be evestment A $320,000 THE 500,000 L3000 1,900,000 the funds reed rate of reta Do not under an hound our answer to two decinal place the market'ered rate of return SIDE Mock C Beta 1.30 (GM) Las 8.75

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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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.
Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. Suppose you are the money manager of a $4.95 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 280,000 1.50 B 460,000 (0.50) C 1,260,000 1.25 D 2,950,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. 2. Madsen Motors's bonds have 13 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10%; and the yield to maturity is 5%. What is the bond's current market price? Round your answer to the nearest cent.
Required information Section Break (8-11) Skip to question [The following information applies to the questions displayed below.] A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 16% 32% Bond fund (B) 10% 23% The correlation between the fund returns is 0.20. Problem 6-8 (Algo) Required: What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
INV 1 6c You have decided to invest in three mutual funds: one in equities, one in long corporate and government bonds, and a money market fund invested in T-bills yielding 5%. Your estimate of the relevant parameters for the equities and bond funds are as follows: Expected Return Standard Deviation Equities .15 .30 Bonds .06 .09 The correlation between the fund returns is 0.12. Determine the best feasible CAL and calculate its reward-to-volatility ratio.
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?
INV 1 6f You have decided to invest in three mutual funds: one in equities, one in long corporate and government bonds, and a money market fund invested in T-bills yielding 5%. Your estimate of the relevant parameters for the equities and bond funds are as follows: Expected Return Standard Deviation Equities .15 .30 Bonds .06 .09 The correlation between the fund returns is 0.12. Compare the portfolios in #4 and #5. Is this consistent with what you would expect when adding the T-bill money market fund as essentially the risk-free asset?
Solve the problems listed below. Show your solution and box the final answer. (bond or yellow paper) 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. How much is the commission of the load? B. What percentage of the offer price does the commission represent? C. What percentage of the net asset value does the commission represent? D. 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. E. By what percentage would the net asset value of the shares have to increase for you to break even? 2. Under peso-cost averaging, an investor will purchase P6,000 worth of stock each year for three years. The stock price is P40 in year 1, P30 in year 2 and P48 in year 3. A. What is the share purchased in every year? B. Compute the average price per share. C. Compute the average cost per share. 3. Under peso-cost…
Suppose you are the money manager of a $4.82 millioninvestment fund. The fund consists of four stocks with the following investments and betas:Stock Investment BetaA $ 460,000 1.50B 500,000 (0.50)C 1,260,000 1.25D 2,600,000 0.75If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’s required rate of return?
Suppose you are the money manager of a $4.92 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 560,000 1.50 B 400,000 (0.50 ) C 1,260,000 1.25 D 2,700,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. Suppose you are the money manager of a $4.92 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 560,000 1.50 B 400,000 (0.50 ) C 1,260,000 1.25 D 2,700,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.07 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 380,000 1.50 B 600,000 (0.50) C 1,140,000 1.25 D 1,950,000 0.75 If the market's required rate of return is 12% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.9% rate of inflation in the future. The real risk-free rate is 2.0%, and the market risk premium is 5.0%. Mudd has a beta of 2.7, and its realized rate of return has averaged 13.0% over the past 5 years. Round your answer to two decimal places.
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…
AmutualfundhasPhP600millionworthofstocks,PhP5millionworthofbonds,andPhP1millionin cash. The fund’s total liabilities amount to PhP 2 million. There are 25 million shares outstanding. You invest PhP 15,000 in this fund. Calculate the NAV. a. 620 b. 24.16 c. 7,500 d. None of these