Alison Wilton, CFA is a senior analyst at W&W Securities (W&WS) and is responsible for managing the High Beta Mutual Fund (HBMF). Josh Palmer, aged 56 and dependent on his portfolio returns, is W&WS's client. His portfolio will now be managed by Wilton, who has been asked to invest 20% of his portfolio funds in HBMF Wilton fills the request forms and immediately purchases shares of HBMF for Palmer. Is Wilton in compliance with codes and standards, and if not, what should be the recommended course of action for Wilton? No, she should consult Palmer's existing investment policy statement (IPS) and should judge the suitability of his investments in the context of his total portfolio Yes, she is in compliance with codes and standards O No, she should make reasonable inquiry about Palmer's risk and return objectives and financial constraints prior to taking investment action requested by Palmer

Alison Wilton, CFA is a senior analyst at W&W Securities (W&WS) and is responsible for managing the High Beta Mutual Fund (HBMF). Josh Palmer, aged 56 and dependent on his portfolio returns, is W&WS's client. His portfolio will now be managed by Wilton, who has been asked to invest 20% of his portfolio funds in HBMF Wilton fills the request forms and immediately purchases shares of HBMF for Palmer. Is Wilton in compliance with codes and standards, and if not, what should be the recommended course of action for Wilton? No, she should consult Palmer's existing investment policy statement (IPS) and should judge the suitability of his investments in the context of his total portfolio Yes, she is in compliance with codes and standards O No, she should make reasonable inquiry about Palmer's risk and return objectives and financial constraints prior to taking investment action requested by Palmer

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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Sophia incorporated a company last year by investing an amount of $5 Million. For the expansion of her business, she needs to acquire additional funds from external sources at least for 5 years but she does not want to dilute her ownership in the business. Sophia should acquire the funds through which of the following sources of finance? Equity shares Both B and C Trade Credit Bonds
Mike, who is a person, who works as a car salesman is also trades in the stock market. In 2020, he had the following stock transactions: Asset Number Asset Date Bought and Price Date Sold and Price 1 50 Shares of IBM Stock 4/23/2014 for $5000 3/05/2018 for $7,000 2 20 Shares of Mitsui Bank 04/06/2018 for $9,000 07/06/2018 for $6,500 3 500 Newmont Mining 05/24/2016 for $7,500 07/09/2018 for $3,500 4 140 Shares of ExxonMobil 03/06/2018 for $7,000 09/20/2018 for $9,000 5 200 Shares of Scams R Us 03/16/2017 for $8,000 03/16/2018 for $1,000 Using the chart below complete the gains and losses and determine the overall gain and loss (10PTS) Asset Number Long Term or Short Term Total Gain/Loss Tax Rate (if Gain) 1 2 3 4 5…
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Joyce has never invested in shares before. She has come to you, as a prospective finance graduate, for some advice. In your conversations with Joyce, you have determined her Required Rate of Return (RRR) to be 8.75%. d) Joyce decided to buy 200 000 shares in GGG Ltd., giving her 2% ownership in the company (GGG Ltd. currently has 10 000 000 issued shares). One year later, GGG Ltd. announces a private placement of a further 10,000,000 shares, in order to raise funds for their new venture: Project COVID. (i) Describe two features of a private placement of shares. (ii) What is the major disadvantage to Joyce of the above private placement? Include in your answer the effect on her ownership. (iii) Identify one other source of equity funding Joyce, as a shareholder, would prefer. Justify your choice.
: Umar applied to a company to buy some shares in April and paid a deposit. He didn’t hear anything from company until November when company sent him a letter of allotment as acceptance and a request for the balance. By this time, Umar had changed his mind and no longer wanted the shares. Question a.Is Umar bound to buy the shares? Why or why not?
On January 1, 2020, Simon Love's portfolio of 15 common stocks had a market value of $256,000. At the end of May 2020, Simon sold one of the stocks, which had a beginning-of-year value of $26,600, for $31,800. He did not reinvest those or any other funds in the portfolio during the year. He received total dividends from stocks in his portfolio of $11,700 during the year. On December 31, 2020, Simon's portfolio had a market value of $245,000. Find the HPR on Simon's portfolio during the year ended December 31, 2020. (Measure the amount of withdrawn funds at their beginning-of-year value.) C Simon's portfolio HPR during the year ended December 31, 2020, is%. (Round to two decimal places.)
A year and half ago, Max purchased 5,000 shares in a mutual fund called Epic Inc. for $15.75/share. Due to COVID-19, the stock was an epic failure and Max decided to sell 3,000 shares on November 30, 2021, when the share price was at $9.55/share. His investment broker counselled him not to sell as the fund was a back-end loaded fund. Year funds are redeemed/sold Within the first year In the second year In the third year In the fourth year In the fifth year In the sixth year After the sixth year Deferred sales charge 6% 5% 4% 3% 2% 1% 0% a) What is the amount that Max will receive for the sale of these shares (ignore income taxes)? Calculate the amount that Max will receive:
John Hill is a Sydney-based investor. He has been closely following his investment in 1,000 shares of Obrekete, an Italian firm that went public in June 2018. When he purchased his 1,000 shares at €80 per share, the euro was trading at AUD$2.5657 / €. Currently, the share is trading at €86 per share and the exchange rate is AUD$2.5563/ €. d. If John waits to sell his shares when the price rises to €88 pet share, what will be his returns? e. If the current spot exchange rate changes to AUD$2.4863 / €, what would be the total return on the Obrekete investment in Australian dollars if the price remains at €86 per share?
Lynch joined an investment club when he got his first job at the accounting firm after he passed his CPA exam. The investment club was actually an LLC and the club did really well. After 10 years, his 5% membership interest in Box-Call, LLC was worth $200,000 and his basis was only $40,000. The club only holds marketable securities. Lynch is tired of going to the weekly meetings of the investment club and has arranged a trade of his interest in Box-Call, LLC with a friend for a 50% interest in Live Decoy, LLC, and up and coming wine distillery. The friend's basis in Live Decoy, LLC was $100,000 and it was valued at $200,000. Are there any tax consequences to Lynch?
Jaleel is holding some Tesla shares (NASDAQ: TSLA) and The TSLA stocks are currently trading at $985 on the Nasdaq. Given TSLA stocks are very volatile, Jaleel wishes to protect the value of his investments. He seeks your advice on using option contracts and presents a list of options for you to choose from. Assume the number of underlying shares per contract is 100 shares. Strike Call premium Moneyness Put premium Moneyness $975 $10.01 $0.01 $980 $4.45 $0.04 $985 $0.63 $0.99 $1005 $0.05 $20.48 (i) Please specify the moneyness of the above options. Are they in the money, at the money or out of the money? (ii) Identify what kind of risk that Jaleel is facing and to hedge this risk, which option would you suggest that Jaleel should purchase? Why?
Please explain every step. Thank you

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