A fund had the following experience over the past 10 years: m co Year Return 4.5% 2 6.0% 3 1.5% 4 -2.0% 5 obal boll 0.0% 22 4.5% 7 3.5% 8 2.5% 5.5% 10 4.0% 34. The arithmetic mean return over the 10 years is closest to: A. 2.97%. bni baud В. 3.00%. С. 3.33%. 35. The geometric mean return over the 10 years is closest to: A. 2.94%. B. 2.97%. C. 3.00%.

Q: 2. You are an advisor reviewing fund managers performance over the last year. Your records indicate…

A: Capital Market Line is the line which represents portfolio that has optimum risk and return…

Q: You are considering an investment in a mutual fund with a 4% load and expense ratio of 0.5%. You can…

A: Concept. Mutual fund is professionally managed fund. Hence various expenses are incurred to manage…

Q: 1. An investment of PhR. 6500.00 earns the following interest per year in-0: 2=0:025, is=0:01,…

A: The interest rate gives the value with which money grow with time and interest is being accumulated…

Q: A cash flow sequence has a receipt of $10,000 today, followed by a disbursement of $9,000 at the end…

A:

Q: The average return, standard deviation, and beta for Fund A is given below along with data for the…

A: Jensen's alpha = Average return less CAPM return of stock

Q: Bendix Mutual Fund Grew At a rate of 6.58% APR compounded daily. Over the same period ACME Mutual…

A: It refers to the annual rate of interest charged to the investors of the bonds, mutual funds, and…

Q: Loaded-Up Fund charges a 12b-1 fee of 1.00% and maintains an expense ratio of 0.50%. Economy Fund…

A: Given, For loaded-up funds: The 12-b1 fee is 1.00% Expense ratio is 0.5%. For economy funds: Front…

Q: $1,000 is invested in a fund at the beginning of the year. The fund rate of return is 8% for the…

A: Investment amount = $1000 Interest rate is divided semi annually First half year, Interest rate = 8%…

Q: The New Fund had average daily assets of $2.2 billion last year. The fund sold $400 million worth of…

A: Turnover ratio is used to measures the efficiency of company to generate revenue with company asset.…

Q: Yamaha Growth Fund has an expense ratio of 1.83%. If you invest $55,000 in this fund, what is the…

A: Expense ratio is the percentage of the fund’s asset which is used for administrative and operating…

Q: gamma fund had return of 16%, a beta of 1.6, and a standard deviation of 29% last year when T-bills…

A: Sharp ratio = (return of potfolio - risk free rate)/ Standard deviation

Q: f you plan to invest for 5 years, what annual rate of return (i.e. gross ret) must the fund…

A: Information Provided: Expense Ratio = 0.5% CD interest = 3.5% Load of mutual fund = 4.5%

Q: Fund One   Fund Two Year Return     Return   2000           2001 9.20%     11.50%   2002 5.20%…

A: Computation of the funds’ value at the completion of every year is shown: Formulation is shown:

Q: From the following mutual funds quotation, complete the following blanks: (negative amount should be…

A: Net Asset Value (NAV) of a fund is the difference between its total assets and liabilities. It is…

Q: The New Fund had average daily assets of $3.9 billion last year. The fund sold $540 million worth of…

A: Turn over ratio is the ratio of total fund sold to average daily assets. It is used to calculate the…

Q: An Active manager of AMF Fund has delivered the following six -monthly returns in the last 5 Years…

A: The information ratio is widely used by fund managers, as it only sees retun and volatility. It is a…

Q: 23. Funds XYZ and ABC have the following as shown below. If you will invest $50,000 and expect a…

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

Q: A closed-end fund starts the year with a net asset value of $12.00. By year-end, NAV equals $12.10.…

A: Rate of return represents the gain or loss in terms of percentage which an investor is expected to…

Q: Jimmy deposits $4,000 now, $2,500 3 years from now, and $5,000 6 years from now. Interest is 5% for…

A: a)How much money will be in the fund at the end of 6 years:

Q: The cashflow below represents the amount invested by a company into a special purpose fund starting…

A: The purchasing power will be the future value of the cash flows at the market rate of interest and…

Q: Index. Fund Average Return Standard Deviation Beta A 14% 28.5% 1.7 S&P 500 17.6% 19.4% 1 Risk-free…

A: treynor ratio =rA-rfβA where, rA=return of stock Arf=risk free rateβA=beta of stock A

Q: You are an advisor reviewing fund managers performance over the last year. Your records indicate…

A: Slope of Capital market line is the sharpe ratio of market portfolio. The portfolio which has equal…

Q: ouiput belowe penarted from regreseing Pund As excees returns on s ecs retums (BAP S00). Tetimate…

A: The Adjusted R squared: In a regression output, the adjusted R-square is a measure of the extent to…

Q: Assume that the fund is liquidated at the end of the fourth quarter, what are the arithmetic,…

A: Calculation of Arithmetic, Geometric and Dollar-Weighted Return:The Arithmetic Return is 1500%,…

Q: 21. Funds Alpha and Beta have the following as shown below. If you will invest $5,000,000 and expect…

A: Solution- Option (A) is correct answer Particulars Working Alpha Beta Investment   50,00,000…

Q: A fund of about P5 million is to be created by 40 quarterly payments at the rate of 4% compounded…

A: The process involving setting aside a common amount after each period in an interest generating…

Q: A closed-end fund starts the year with a net asset value of OMR10. By year end, NAV equals OMR10.10.…

A: Closed-end funds are investment companies whose equity or ETF shares are exchanged in the free…

Q: For the same two funds discussed in Q2 the ending wealth after five years was $1.2438 per dollar…

A: A compound annual growth rate(CAGR) is the method in which we calculate the total return from an…

Q: A fund begins with $10 million and reports the following three-month results (with negative figures…

A: Return on investment: In a very generic sense, returns on an investment refer to the gains or losses…

Q: n a recent 5-year period, mutual fund manager Diana Sauros produced the following percentage rates…

A: Average return of a security is the arithmetic mean of the returns of the security generated over a…

Q: You are an advisor reviewing fund managers performance over the last year. Your records indicate…

A: capital line formula: portfolio return =rf+rm-rfσm×σpwhere,rf=risk free raterm=market returnσp=…

Q: What was its turnover ratio?

A: A turnover ratio represents the quantity of property or liabilities that a business enterprise…

Q: 2. Determine the future value of each 5-year inv has a 1.5% management fee. a) $2000 in an…

A: Management fee = 1.5% N = 5 years Annual Compounding Option A. 2000 Investment with growth of 6.92%…

Q: 2. You are an advisor reviewing fund managers performance over the last year. Your records indicate…

A: Sharpe ratio is the addition return earned over risk free rate per unit of risk of asset. Sharpe…

Q: Determine the impact of costs of each investment policy in the following years: a. 3 Years b. 8…

A: Here, Front End Load or Load on Purchases is a one time expense which is paid at the time of…

Q: An investment has the following cash flow series where interest is 7.0%: End of Year Cash Flow End…

A: The conceptual formula is:

Q: Determine the impact of costs of each investment policy in the following years: a. 3 Years b. 8…

A: Here, Front End Load or Load on Purchases is a one time expense which is paid at the time of…

Q: The New Fund had average daily assets of $3.2 billion in the past year.  The fund sold $500 million…

A: a.Given,Average Daily Assets = $3,200,000,000Fund Sold = $500,000,000a.Given,Average Daily Assets =…

Q: Fund One   Fund Two Year Return     Return   2000           2001 9.20%     11.50%   2002 5.20%…

A: To calculate the value of fund at the end of each year, we have to calculate return each year. First…

Q: $1,000 is invested in a fund at the beginning the year. The fund rate of return is 8% for the first…

A: The money weighted return used the IRR method of return computation, while the time weighted return…

Q: In a recent 5-year period, mutual fund manager Diana Sauros produced the following percentage rates…

A: Fund Market Index 1 -1.30% 0.60% 2 24.60% 18% 3 40.60% 31.60% 4 11.60% 10.90% 5 0.40%…

Q: eflook roblem 17-06 he Global Growth Fund is a load fund with a 5 percent front load fee. It started…

A: Net asset value is the difference of funds assets and liabilities.

Q: Corporate Fund started the year with a net asset value of $12.50. By year-end, its NAV equaled…

A: The calculation of the pre-tax rate of return as follows:

Q: 17. Average Return and Standard Deviation. In a recent 5-year period, mutual fund manager Diana…

A: Risk and return both are important factors for taking any investment decision. Return means earn an…

Q: 20)Corporate fund started the year with a net asset value of GHS12.25. By year-end, its NAV equaled…

A: Given Information:Net asset value at beginning (NAV0) is 12.25 Net asset value at the end (NAV1) is…

Q: return

A: Formulas: a) Rate of return to an investor is: (1-sale @ year end)NAV1 - (1+sale at year…

Q: Nate VM is a fund manager and proprietor at Dumo Capital limited. Nate has just forecasted the…

A:

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.