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
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- 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)? b) Knowing that capital losses are applied against capital gains, what would be the overall taxes payable if Max sold shares in another company called Save The Day Inc. which resulted in a capital gain in 2021 of $50,000 and the shares in point a)? Max is a resident of Quebec and in the highest tax bracket. See Table A. Calculate the amount of taxes payable…Please provide detailed explanation: #5 Sarah Mix decides to invest $500 per month in three funds, with $200 going into a small capital growth fund, and $150 going into a large capital growth fund, and $150 into an international fund. She tracked the price she paid for stock in these funds over a 6-month period, as shown in the attached image of Table 3. What is the average price paid per share in each mutual fund? How much has Sarah invested in mutual funds? What is the current value of her investment? Which fund is currently performing best for Sarah?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
- 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 Deferred sales charge Within the first year 6% In the second year 5% In the third year 4% In the fourth year 3% In the fifth year 2% In the sixth year 1% After the sixth year 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 Applicable charge=5% Number of shares to be sold=3000 The investment value of these shares=3000*15.75=$47,250 The back end charge=$47,250*5%=$2,362.5 The fund received on selling=3000*$9.55=$28,650 Net receipt=28,650-2,362.5-$26,287.5 b) Knowing that capital losses are applied against capital gains, what would be the…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 Deferred sales charge Within the first year 6% In the second year 5% In the third year 4% In the fourth year 3% In the fifth year 2% In the sixth year 1% After the sixth year 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: b) Knowing that capital losses are applied against capital gains, what would be the overall taxes payable if Max sold shares in another company called Save The Day Inc. which resulted in a capital gain in 2021 of $50,000 and the shares in point a)? Max is a resident of Quebec and in the highest tax bracket. See…As the Fund Manager for Bank of Trinidad and Tobago Limited, you are to advise the following two (2) clients based on their respective financial situations. a) Your best friend has asked to assist him in making the best investment out of the following options. Which would you advise him to choose and why? Show your workings to justify your response.Option 1: $12,000 in 5 years’ time at 6 percent interest.Option 2: $15,000 in 2 years’ time at 9 percent interest.Option 3: $15,000 today. No strings attached.Option4: $5,000 each year for 2 years at 7 percent interest compounded semi-annually. b) Betty Kay has a contract in which she will receive the following payment for the next 5 year: $1,000, $2,000, $3,000, $4,000 and $5,000. She will then receive an annuity of $8,500 a year for the end of the 6th through the end of the 15th year. She is offered a $30,000 to cancel the contract. If the payments are discounted at 14 percent should she cancel the contract?
- As the Fund Manager for Bank of Trinidad and Tobago Limited, you are to advise the following two (2) clients based on their respective financial situations. a) Your best friend has asked to assist him in making the best investment out of the following options. Which would you advise him to choose and why? Option 1: $12,000 in 5 years’ time at 6 percent interest.Option 2: $15,000 in 2 years’ time at 9 percent interest.Option 3: $15,000 today. No strings attached.Option4: $5,000 each year for 2 years at 7 percent interest compounded semi-annually.b) Betty Kay has a contract in which she will receive the following payment for the next 5 year: $1,000, $2,000, $3,000, $4,000 and $5,000. She will then receive an annuity of $8,500 a year for the end of the 6th through the end of the 15th year. She is offered a $30,000 to cancel the contract. If the payments are discounted at 14 percent should she cancel thecontract?John Mesa, CFA, is a portfolio manager in the Trust Department of BigBanc. Mesa has been asked to review the investment portfolios of Robert and Mary Smith, a retired couple and potential clients. Previously, the Smiths had been working with another financial advisor, WealthMax Financial Consultants (WFC). To assist Mesa, the Smiths have provided the following background information. Family: We live alone. Our only daughter and granddaughter are financially secure and independent. Health: We are both 65 years of age and in good health. Our medical costs are covered by insurance. Housing: Our house needs major renovation. The work will be completed within the next 6 months, at an estimated cost of $200,000. Expenses: Our annual after-tax living costs are expected to be $150,000 for this year and are rising with inflation, which is expected to continue at 3 percent annually. Income: In addition to income from the Gift Fund and the Family Portfolio (both described below), we…Judah invests $7 million in a hedge fund with a 2/20 fee structure. The fund has a total of $93 million of assets under management and the return in the first year is 22%. Assume that management fees are paid at the beginning of each year and performance fees are paid at the end of each year in which they are applicable. What is the amount of the performance fee that Mr. Dowdy will pay in the first year? O $276,300 O $273,840 O $1,369,200 O $283,900 O $300,000
- Mustafa Kurtulmuş has always been proud of his personal investment strategies and has done very well over the past severalyears. He invests primarily in the stock market. Over the past several months, however, Mustafa has become very concerned aboutthe stock market as a good investment. In some cases, it would have been better for Mustafa to have his money in a bank than in themarket. During the next year, Mustafa must decide whether to invest 10,000 TRY in the stock market or in a certificate of deposit (CD)at an interest rate of 9%*. If the market is good, Mustafa believes that he could get a 14% return on his stock market investment. Witha fair market, he expects to get an 8% return. If the market is bad, he will most likely get no return at all - in other words, the returnwould be 0%. Mustafa estimates that the probability of a good market is 0.4, the probability of a fair market is 0.4, and the probabilityof a bad market is 0.2, and he wishes to maximize his long-run average…Allen Young has always been proud of his personal investment strategies and has done very well over the past several years. He invests primarily in the stock market. Over the past several months, how ever, Allen has become very concerned about the stock market as a good investment. In some cases it would have been better for Allen to have his money in a bank than in the market. During the next year, Allen must decide whether to invest $ 10,000 in the stock market or in a certificate of deposit (CD) at an interest rate of 9%. If the market is good, Allen believes that he could get a 14% return on his money. With a fair market, he expects to get an 8% return. If the market is bad, he will most likely get no return at all - in other words, the return would be 0%. Allen estimates that the probability of a good market is 0.4, the probability of a fair market is 0.4, and the probability of a bad market is 0.2, and he wishes to maximize his long - run average return. (a) Develop a decision…Bhavika Investments, a group of financial advi-sors and retirement planners, has been requested to provide advice on how to invest $200,000 forone of its clients. The client has stipulated thatthe money must be put into either a stock fund ora money market fund and the annual return shouldbe at least $14,000. Other conditions related to riskhave also been specified, and the following linear program was developed to help with this invest-ment decision: Minimize risk = 12S + 5Msubject toS + M = 200,000 total investment is$200,000 0.10S + 0.05M Ú 14,000 return must be at least $14,000 M Ú 40,000 at least 40,000 must bein money market fund S, M Ú 0whereS = dollars invested in stock fundM = dollars invested in money market fundThe QM for Windows output is shown below.(a) How much money should be invested in themoney market fund and the stock fund? What isthe total risk?(b) What is the total return? What rate of return isthis?(c) Would the solution change if the risk measurefor each dollar…