The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return continues indefinitely.) Mutual Fund $ Type Rate of Return Fidelity Growth Company Stock fund 30.31% Vanguard 500 Index Stock fund 17.98% PIMCO Total Return Bond fund 3.63% Vanguard Total Bond Market Index Bond fund 3.10% For the past 15 years you have been depositing $400 per month in the Vanguard Total bond fund, and you have now transferred your current balance to the PIMCO bond fund, where you plan to continue depositing $400 per month until you retire in 20 years. How much can you anticipate having in the Investment when you retire? HINT [See Example 1.] (Round your answer to the nearest cent.) x

The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return continues indefinitely.) Mutual Fund $ Type Rate of Return Fidelity Growth Company Stock fund 30.31% Vanguard 500 Index Stock fund 17.98% PIMCO Total Return Bond fund 3.63% Vanguard Total Bond Market Index Bond fund 3.10% For the past 15 years you have been depositing $400 per month in the Vanguard Total bond fund, and you have now transferred your current balance to the PIMCO bond fund, where you plan to continue depositing $400 per month until you retire in 20 years. How much can you anticipate having in the Investment when you retire? HINT [See Example 1.] (Round your answer to the nearest cent.) x

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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If an investor buys shares in a no-load mutual fund for $33 and after eight years the shares appreciate to $60, what is (1) the percentage return and (2) the annual compound rate of return using time value of money? Round your answers to two decimal places. Percentage return: % The annual compound rate of return: %
When Fund H started on 1/1/21, it had $318,225,000 in assets under management (AUM). The annual holding period return was 3.65% in 2021, -20.48% in 2022, and 31.48% in 2023. Some investors redeemed shares, resulting in a net cash outflow of $120,204,000 on 12/31/21. There were also new investors buying the fund shares, resulting in a net cash inflow of $27,885,000 on 12/31/22. The dollar- weighted average return of the fund is % per year during the three-year period. Multiple Choice O O O O O 3.55 3.86 5.12 4.32 2.97
Corporate Fund started the year with a net asset value of $17.80. By year - end, its NAV equaled $16.30. The fund paid year - end distributions of income and capital gains of $2.20. What was the (pretax) rate of return to an investor in the fund?
If an investor buys shares in a no-load mutual fund for $30 and after five years the shares appreciate to $46, what is (1) the percentage return and (2) the annual compound rate of return using time value of money? Round your answers to two decimal places. Percentage return: % The annual compound rate of return: %
You invested $25,000 in a mutual fund at the beginning of the year when the NAV was $33.16. At the end of the year the fund paid $.27 in short-term distributions and $.44 in long-term distributions. If the NAV of the fund at the end of the year was $37.81, what was your return for the year?
Section Break (8-11) [The following information applies to the questions displayed below.] A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Stock fund (S) Bond fund (B) Expected Return 16% 10% The correlation between the fund returns is 0.20. Standard Deviation 36% 27% Problem 6-8 (Algo) Required: What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return % Standard deviation %
The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return continues indefinitely.) Mutual Fund Fidelity Growth Company Vanguard 500 Index PIMCO Total Return Vanguard Total Bond Market Index Rate of Return 14.83% 14.25% 3.77% 3.67% Stock fund Stock fund Type Bond fund Bond fund How much should you pay each month into a retirement account invested in the Vanguard bond fund if you wish to retire in 35 years with an investment valued at three million dollars? HINT [See Quick Example 2.] (Round your answer to the nearest cent.) $
Required information [The following information applies to the questions displayed below.] A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return 16% 10% Stock fund (S) Bond fund (B) The correlation between the fund returns is 0.10. Portfolio invested in the stock Portfolio invested in the bond Expected return Standard deviation Required: Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Standard Deviation 38% 29% % % % %
Nn. 119.
7. Impacts of Costs on Returns. A mutual fund has a 1.6% expense ratio and begins with a $124.655 NAV. It experiences the annual returns shown below. What are the end-of-year NAVS after fees for each year? What are the after-fee returns each year? (LO 4-4) Money to Invest NAV Expense ratio Year 1 return Year 2 return Year 3 return Year 4 return Year 5 return $ 10,000.00 $ 124.655 1.6% 5% -12% 18% 4% 23%
Required information [The following information applies to the questions displayed below.) A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Stock fund (S) 17% Bond fund (8) 11% The correlation between the fund returns is 0.15. Required: Solve numerically for the proportions of each asset and for the expected return and standard deviation of the optimal risky portfolio. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Portfolio invested in the stock Portfolio invested in the bond Expected return Standard deviation % % Standard Deviation 34% 25% % %
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