Problem 4-18 (Algo) Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.80%, Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.20%. Assume the rate of return on both funds' portfolios (before any fees) is 8% pen year. Required: 6. How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Loaded Up Fund Economy Fund Investment Values

Problem 4-18 (Algo) Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.80%, Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.20%. Assume the rate of return on both funds' portfolios (before any fees) is 8% pen year. Required: 6. How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Loaded Up Fund Economy Fund Investment Values

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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Ee 285.
ems with IRR Suppose you are offered a project with the following cash flows: Year Cash Flows 0 $ 8,900 1 -4,600 2 -3,300 3 -2,400 4 -1,700 a. What is the IRR of this offer? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % b. If the appropriate discount rate is 11 percent, should you accept this offer? O Reject Accept c. If the appropriate discount rate is 23 Sercent, should you accept this offer? 3 Percent, should you accept this offer? O Accept O Reject d-1. What is the NPV of the offer if the appropriate discount rate is 11 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d-2. What is the NPV of the offer if the appropriate discount rate is 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $770 2 1,030 3 1,290 4 1,400 a. If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 25 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Assume that the fund is liquidated at the end of the fourth quarter, what are the arithmetic, time-weighted (geometric), and dollar-weighted average rates of return? 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Assets Under Managment at start of quarter ($ milion) 10 12.5 21.25 9 Holding-period return (%) 15% 30% -20% 25% Total assets before net inflows 11.5 16.25 17 11.25 Net inflow ($ million) 1 5 -8 6 Assets under managment at end of quarter ($ million) 12.5 21.25 9 17.25
31% D 4:28 D) None of the above 21. Funds Alpha and Beta have the following as shown below. If you will invest $5,000,000 and expect a rate of return on both funds 14%, which statement is CORRECT? (*Note that the Back-End load declines by 1% annually) * Fund Alpha Fund Beta Front-End load 0% 5% Back-End Load 7%* 0% 1.2% 12B-1 fees 0.85% Expense Ratio 0.15% 0% A) Fund Alpha is better than Fund Beta since value of investment in 3 years is greater. B) Fund Beta is better than Fund Alpha since value of investment in 3 years is greater. C) Value of investment of Fund Alpha in 10 years $16,972,836 D) A & C E) None of the above
Operating Expenses 0.0075 Front-End Load 0.0500 12B-1 Charges 0.0025 Bank CD Interest Rate 0.0600 Required: Using the information in the table above calculate the minumum rate of return this fund will need to generate in order to be at least as well off as investing in a bank CD.
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Loaded-Up Fund charges a 12b-1 fee of 0.75% and maintains an expense ratio of 0.75%. Economy Fund charges a front-end load of 2.5%, but has no 12b-1 fee and an expense ratio of 0.25%. Assume the rate of return on both funds’ portfolios (before any fees) is 12% per year. How much will an investment of $1,000 in each fund grow to after: 1 year 3 years 10 years
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Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.70%. Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.30%. Assume the rate of return on both funds' portfolios (before any fees) is 6% per year. Required: a. How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Loaded-Up Fund Economy Fund Investment Values b. How much will an investment of $100 in each fund grow to after 4 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Loaded-Up Fund Economy Fund Investment Values
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