Answered: Natasha currently owns 2 mutual funds:…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Natasha currently owns 2 mutual funds: a bond fund and a Canadian equity fund. She would like to use one of them as her registered
retirement savings plan (RRSP) contribution for the year. From a tax efficiency perspective, which mutual fund should she contribute?
O either since it makes no difference
O the bond fund
O the equity fund
O it depends on her marginal tax rate

Transcribed Image Text:Danny is a Dealing Representative for Everbright Investments. He met with his client Adele, who has $1,000,000 to invest. During their meeting Danny determines that Adele has a high-risk profile. In addition, he learns that she has an excellent understanding of equities and how volatile they can be. Danny is considering recommending growth funds specifically, and making a recommendation from the following investment options: 5-year Annualized Returns net of MER. MER Sharpe Ratio ABC Global Equity Fund DEF European Equity Fund 7% 1% 0.40 7% 2% 0.30 LMN Asia Pacific Equity Fund 7% 3% 0.20 Based on the information provided, which mutual fund should Danny recommend? ABC Global Equity Fund. O DEF European Equity Fund. OLMN Asia Pacific Equity Fund. O Invest equally in all 3 funds

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