23. Funds XYZ and ABC have the following as shown below. If you will invest$50,000 and expect a rate of return on both funds 14%, which statement isCORRECT? (*Note that the Back-End load declines by 1% annually) *Fund XYZFund ABCFront-End load0%6%Back-End Load5%9*0%12B-1 fees1%0.75%Expense Ratio0.5%0.25%A) Fund ABC is better than Fund XYZ since value of investment in 4 years is greater.B) Fund XYZ is better than Fund ABC since value of investment in 4 years is greater.C) Value of investment of Fund ABC in 6 years $97,851.73D) B & CE) None of the above

Answer: B & C Solution: Value of Investment = Investment×(1-front end load)×(1+r-true expense…

23. Funds XYZ and ABC have the following as shown below. If you will invest $50,000 and expect a rate of return on both funds 14%, which statement is CORRECT? (*Note that the Back-End load declines by 1% annually) * Fund XYZ Fund ABC Front-End load 0% 6% Back-End Load 5% 0% 12B-1 fees 1% 0.75% Expense Ratio 0.5% 0.25% A) Fund ABC is better than Fund XYZ since value of investment in 4 years is greater. B) Fund XYZ is better than Fund ABC since value of investment in 4 years is greater. C) Value of investment of Fund ABC in 6 years $97,851.73 D) B & C E) None of the above

23. Funds XYZ and ABC have the following as shown below. If you will invest $50,000 and expect a rate of return on both funds 14%, which statement is CORRECT? (Note that the Back-End load declines by 1% annually) Fund XYZ Fund ABC Front-End load 0% 6% Back-End Load 5% 0% 12B-1 fees 1% 0.75% Expense Ratio 0.5% 0.25% A) Fund ABC is better than Fund XYZ since value of investment in 4 years is greater. B) Fund XYZ is better than Fund ABC since value of investment in 4 years is greater. C) Value of investment of Fund ABC in 6 years $97,851.73 D) B & C E) None of the above

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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Y8
The offer price of an open-end fund is $24.00 and the fund is sold with a front-end load of 11.00%? What is the fund's NAV? Multiple Cholce $13.00 $23.89 $21.36 $20.00
The value in pounds of a fund at time t = 0 is V0 = 50, 000. After one year (at t = 1) it has increased to V1 = 51, 500 and at that time £1, 500 is withdrawn. After two years (at t = 2) the fund is worth V2 = 50, 800. (a) Compute the time-weighted rate of return. (b) If the fund is liquidated after two years what is the yield that has been achieved?
A fund has an initial investment of $100 million from investors. The investors will receive an 8 percent preferred return. After the preferred return is met, remaining distributions will be split 80 percent to the investors and 20 percent to the fund manager. Funds available for distribution after the regular fund management fee are as follows: Fund Cash Flow for Distribution After Management Fee Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8. Year 9 Year 10 $ 5.00 $ 10.00 $ 20.00 $ 30.00 $ 50.00 $ 40.00 $ 30.00 $ 20.00 $ 10.00 $ 5.00 Required: a. How many years will it take until the investor gets the 8 percent preferred return? b. What will be the split in distributions to the investor and the manager for the year found in which preferred return is achieved? c. What will the investor's IRR be over the entire 10 years? d. What will the total promote earned by the fund manager be for the 10 years?
Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $7,000 $ 10,000 2 8,000 3 9,000 4 10,000 $ 34,000 9,000 8,000 7,000 $ 34,000 The discount rate is 7%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.
Stepwise pls
A 07. Subject:- finance
Annual cash inflows that will arise from two competing investment projects are given below: Investment A $ 3,000 4,000 5,000 6,000 $ 18,000 Year 1 2 3 4 The discount rate is 10% Click here to view Exhibit 148 1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables Required: Compute the present value of the cash inflows for each investment Year 1234 S S Investment B $6,000 5,000 4,000 3,000 $18,000 Present Value of Cash Flows Investment A 300 300 $ Investment B
None
High Growth Fund has a front load of 5% and expected return of 14.5%. Normal Fund has no load. And expected return of 13.8%. Which fund would you hold if you expect to hold the fund for 5 years? How about holding the fund for 10 years? Please show how to solve in excel
H3
What is the present value of an investment with the following cash flows? Year 1 $14,000 Year 2 $20, 000 Year 3 $30,000 Year 4. $ 43,000 Year 5. $ 57,000 Use a 7% discount rate, and round your answer to the nearest $1. a. $128, 487 b. $107, 328 c. $112, 346 d. $ 153, 272

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