23. Alisha is interested in a specific mutual fund. She has $45,000 to invest now and will be able to add another $7,000 to her account in less than a year. She indicates that she considers mutual funds to be long term investments. You are considering three options for Alisha's investment purpose .The first is to have her invest in A shares and sign a letter of intent to invest the extra $7,000 sometime in the next 13 months. The second is tohave her invest in B shares whose prospectus states that the shares will be covert to A shares after 7 years. The third is to have her invest in C shares. If breakpoints kick in at $25,000 and become more significant the higher the invested amount, which of those options is most suitable for Alisha? a. C shares b. B shares c. A shares d. Not any of the above mentioned

23. Alisha is interested in a specific mutual fund. She has $45,000 to invest now and will be able to add another $7,000 to her account in less than a year. She indicates that she considers mutual funds to be long term investments. You are considering three options for Alisha's investment purpose .The first is to have her invest in A shares and sign a letter of intent to invest the extra $7,000 sometime in the next 13 months. The second is tohave her invest in B shares whose prospectus states that the shares will be covert to A shares after 7 years. The third is to have her invest in C shares. If breakpoints kick in at $25,000 and become more significant the higher the invested amount, which of those options is most suitable for Alisha? a. C shares b. B shares c. A shares d. Not any of the above mentioned

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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20
\\nAssume you have established a trust account for your child, which she will have access to once she reaches the age of 25. This daughter just turned 24 today, so the first payment will occur at the end of this year, upon her 25th birthday. Under the terms of the trust agreement, she will receive $10,000 upon her 25th birthday, $20,000 upon her 26th birthday, $30,000 on her 27th birthday, and $50,000 on her 28th birthday. If she puts all of these payments into savings, and she can earn a rate of 5%, how much will she have in total on her 28th birthday? Calculate the FV of these cash flows at the end of year 4 (her 28th birthday).\\n
3
Array intends to allocate her savings into various types of financial investments. She has $184,100 to invest in stocks, bonds, and mutual funds according to her chosen 10 2 10 ratio 779 investment? Round your answers to the nearest dollar. Stocks: $ Bonds: $ respectively. How much should she invest in each type of Mutual Funds: $
Jennifer establishes an investment account to pay for college expenses for her daughter. She plans to invest X at the beginning of each month for the next 20 years. Beginning at the end of the 17th year, she will withdraw 55,000 annually. The final withdrawal at the end of the 20th year will exhaust the account. She anticipates earning an annual effective yield of 11% on the investment. Calculate X. 276.80 307.70 317.60 346.20 349.10
"Amber recently inherited $510,000, which she immediately invested in an equity index mutual fund. If she plans to withdraw $2,000 per month from her account, what annual interest rate must she earn in order to have $128,000 left after 43 years? (Enter your answer as a whole number with two decimal places. For example, if your answer is 14.1025%, enter 14.10 as your answer)"
Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purchase life insurance protection for the next 10 years while her children are growing up. Tina tells you that she can afford about $250 per year for insurance premiums. You have suggested either a 10-year term policy or a whole life policy. Rounded to the nearest thousand, how much insurance coverage can Tina purchase under each policy? Hint: Divide her annual premium allowance by the rate per $1,000 for each policy. If she should die in the next 10 years, how much more will her children receive under the term insurance? If she should live beyond the 10th year, what are her nonforfeiture options with the whole life policy?
Assume that Steven is 28 years old, works as a lawyer and plans to retire at the age of 55. He is thinking of depositing each month while he works as a lawyer and expects an APR of 7.5% on his investments during these years before the retirement. Starting with the end of the first month of the retirement period Steven wants to withdraw $1100 each month till the age of 80. For this reason Steven plans to deposit his money accumulated by the time of retirement in one of the financial institutions at 4.8%. How much does he needs to save while working as a lawyer if he puts money away monthly in equal end-of-the-month amounts?
Doris plans to save $5000 per year for the next 35 years. Her money will be deposited in a stock market index fund that has a 0.5% annual management fee. If this fund earns 6% per year, how much will Doris save by investing in this fund instead of an actively managed mutual fund that has a 1% annual fee? Compute your answer as a future amount at the end of year . Assume that payments are made at the end of year. The future equivalent of savings amount at the end of year 35 is ___.
14) Dixon Shuttleworth has been offered the choice of three retirement-planning investments. The first investment offers a 5 percent return for the first 5 years, a 10 percent return for the next 5 years, and a 20 percent return thereafter. The second investment offers 10 percent for the first 10 years and 15 percent thereafter. The third investment offers a constant 12 percent rate of return. Determine, for each of the given number of years, which of these investments is the best for Dixon if he plans to make one payment today into one of these funds and plans to retire in the following number of years. a. 15 years b. 20 years c. 30 years

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