4. CMD Asset Management has the following fee structure for clients in its equity fund:1.00% of first $5 million invested0.75% of next $5 million invested0.60% of next $10 million invested0.40% above $20 milliona. Calculate the annual dollar fees paid by Client 1, who has $27 million under manage-ment, and Client 2, who has $97 million under management.b. Calculate the fees paid by both clients as a percentage of their assets undermanagement.c. What is the economic rationale for a fee schedule that declines (in percentage terms)with increases in assets under management?

a. The annual dollar fees paid by client 1 is calculated below:

Answered: 4. CMD Asset Management has the…

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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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?
Calculate the quick ratio and indicate wheather the ratio is favorable or unfavorable. Current Liabilities $28,000,000.00 Cash: $27,000,000 Investments $36,000,000 Accounts Receibable $12,000,000.00 Due from other funds: $2,500,000.00
Stepwise pls
For each of the investments below, calculate the rate of return earned over the period. Cash Flow During Period - $900 14,000 5,000 70 1,500 (Click on the icon here in order to copy the contents of the data table above into a spreadsheet.) Investment A B C D E Beginning-of-Period End-of-Period Value Value $1,400 140,000 55,000 500 14,000 $400 115,000 49,000 200 12,600
man.9
Please Need Correct Answer with Explanation with calculation
An employee at Azai Bank seeks to evaluate a transaction using the risk-adjusted return on capital (RAROC) model. The transaction entails extending a loan to an agro-based entity with the following details:- The risk-free rate of return is 7%- Loss given default (LGD) = 51%- Exposure at default (EAD) = ZMW 2.5 million- Probability of default (PD) = 40 basis points The bank's economic capital (EC) model assesses an EC charge for the firm, equivalent to 5% of EAD, amounting to ZMW 100,000. Assuming a RAROC hurdle rate of 15%, the transaction yields a net profit of ZMW 14,000 before other adjustments. Tasks:A. Calculate the bank’s risk-adjusted rate of return on the loan to the agricultural company. B. Additionally, consider the scenario where the bank could have extended a loan of the same amount, generating an identical net profit of ZMW 14,000 before adjustments to a pharmaceutical products manufacturing firm, with an EC of 2.5%. C. Determine which loan the bank should prioritize…
A firm has two possible investments with the following cash inflows. Each investment costs $435, and the cost of capital is seven percent. Use Appendix B and Appendix D to answer the questions. Assume that the investments are not mutually exclusive and there are no budget restrictions. Cash Inflows Year A B 1 $ 270 $ 170 2 140 170 3 100 170 Based on each investment’s net present value, which investment(s) should the firm make? Use a minus sign to enter negative values, if any. Round your answers to the nearest dollar. Investment A: $ Investment B: $ The firm should make . Based on each investment’s internal rate of return, which investment(s) should the firm make? Round your answers to the nearest whole number. Investment A: % Investment B: % The firm should make . Is this the same answer you obtained in part b? It the same answer as obtained in part b. If the cost of capital were to increase to 9 percent, which investment(s) should the firm…
Please give answer a & b And Don't give answer in image format
A commercial real estate investment fund must report its quarterly investment performance to investors. A summary of its (1) beginning and end-of-quarter assets and equity and (2) cash inflows and outflows during the quarter are as follows: Beginning of Quarter During Quarter $69 million Cash $10 million NOI from operations $519 million Market value of props $2 million Paid management fees $39 million Other Investments $25 million Distributions to investors $338 million Fund debt $219 million Investor contributions $194 million Property acquisitions $44 Property dispositions Other investments will earn 4% interest (1% per quarter) and property debt will be at a 6% rate (1.5% per quarter). The properties were appraised at the end of the quarter for $674 million. Assume any interest on short-term investments is offset by interest paid on short-term debt. Required: a. What would be the beginning equity value? b. What would be the ending equity value (MVEE)?…
6. Consider the following (incomplete) sinking fund schedule (table). Note that there is no payment at t = 2. You MUST show your work to answer each of the two parts of this problem. Time Interest Sinking Interest S.F. Bal. After Net in on Fund on Balance Years Loan Deposit $0 S.F. $0 Deposit on Loan $0 $0 $100 $2,000 1 $700 3 $795 $35.44 4. $0 (a) Find the net balance on loan at t = 3. (b) Find the sinking fund deposit at t= 4.

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