You are a provider of portfolio insurance and are establishing a 4-year program. The portfolio you manage is worth $110 million, and you hope to provide a minimum return of 0%. The equity portfolio has a standard deviation of 23% per year, and T-bills pay 5% per year. Assume that the portfolio pays no dividends.

Q: You invest in a mutual fund that charges a 4% front-end load, 2% total annual fees, and a 3%…

A: Given:  Investment Amount = $10,700  Front-end load = 4%  Total annual fees = 2%  Back-end load = 3%…

Q: How much market value of each of the zeros will be necessary to fund the plan if you desire an…

A: Information Provided: Annuity amount = $1.4 million per year Interest rate = 8%

Q: 5. To invest capital, a person has the following options: a） Fixed-term investment with interest of…

A: Effective rate of return refers to the percentage of return from the investment with the effect of…

Q: Maryse has invested $1000 into mutual fund at a 5% annual rate of return, compounded daily. What are…

A: Nominal interest rate is the stated interest rate on the fund, whereas effective interest rate is…

Q: Suppose you purchase 500 shares of Blue Acre, which currently trading at $60 per share. Suppose that…

A: Margin trading involves borrowing funds from a broker to purchase securities, such as stocks, bonds,…

Q: A portfolio consists of two types of loans. The first is a $30 million loan that requires a single…

A: Workings: Second Loan         Interest rate =9%                   Years 1 2 3 Sum…

Q: Kristina pays $5,000 for shares in a new company. She sells the shares 10 years later for $22,500.…

A: Given Sale amount is $22,500. Purchase amount is $5,000.

Q: You invest in a mutual fund that charges 3.8% front-end load, 0.75% in total annual fees, and a 3%…

A: Front end load is the amount of deduction at the time of purchase and back end load is the charges…

Q: You are a fixed term interest rate portfolio manager and have been advised that cash inflows for the…

A: Time-weighted rate  (TWR) is a method for finding compounded return of an investment divided into…

Q: You plan to invest in securities that pay 15.0%, compounded annually. If you invest $2,000 today,…

A: The concept of time value of money will be used here. When an amount is invested today then it grows…

Q: You manage a pension fund that will provide retired workers with lifetime annuities. You determine…

A: A.Five Year Zero Coupon Bond= $12 million Twenty Year Zero Coupon Bond= $8 million B.Fave Value of…

Q: Mutual funds charge their clients an “expense ratio” for managing yourfunds. A 1.5% annual expense…

A: The future value is the future worth of cash flow at a certain rate of interest after a certain…

Q: You are planning to save for retirement over the next 30 years. To do this, you will invest RM700 a…

A: The amount that a present investment will gain in value over time when kept in a compound interest…

Q: You manage a pension fund that will provide retired workers with lifetime annuities. You determine…

A: Solution: Formula:

Q: Calculate the value of a bond that will mature in 15 years and has a ​$1,000 face value. The annual…

A: Current value of bond:A bond's current value is the present value of all of its future cash flows,…

Q: Suppose that $18,000 is invested in a bond fund and the account grows to $23,344.74 in 5 yr. a. Use…

A: Continuously compounded interest rate is the interest which is calculated on the principal amount as…

Q: You attempt to finance a 10-year guaranteed investment contract (GIC). The payment made by…

A: given   GIC is 5%. The bond you want to use is a 15-year, 5% annual coupon rate bond (semiannually…

Q: Assume that you are 21 and that you will retire in 50 years at age 70. Assume two different saving…

A: Scenario 1:  Payments "PMT" of $1200 is made in the savings account for 10 years at a rate "r" of…

Q: t 35 years old, you have an investment portfolio of $150,000.  You are looking into adjusting the…

A: Future value of money is amount being deposited and amount of the compounding interest accumulated…

Q: Suppose you wish to retire in 43 years on a fixed income equiva- lent to $66,000.00 in today's…

A: One of the important techniques that are used by the management in various areas such as a…

Q: You are trying to sell a mutual fund to a customer, who can tolerate losing more than 10% of assets…

A: In this case, there is a selection of investment on the basis of probability. It can be calculated…

Q: You deposit $12,000 per year over 15 years in a stock portfolio. After that you do not make any…

A: Future value (FV) is a financial concept that represents the value of an investment or asset at a…

Q: You are managing a portfolio of $2 million. Your target duration is 13.5 years, and you choose to…

A: The duration of a bond refers to the time it takes for the cash flows of the bond to cover the…

Q: a. What is the present value of a security that will pay $4,000 in 20 years if securities of equal…

A: a) Present value = Future value /(1+rate)^years

Q: You have invested P100,000 in a mutual fund that promises to pay 8% each year. You will keep this…

A: Future value of the present amount With present value (PV), interest rate (i) and period (n), the…

Q: The market value of an investor s portfolio is currently $450,000. The investor requires that the…

A: According to the rule, because you have posted multiple questions we will answer the first question…

Q: e managing a portfolio of $1 million. Your target duration is 10 years, and you can in onds, a…

A: A mix of various investment alternatives that an investor puts his money into is regarded as a…

Q: You invest $1000 dollars in a mutual fund with a 2% front-end load, and an expense ratio of 0.5%. If…

A: Worth of investment refers to the amount invested less all expenses and load on the investment for…

Q: Mustafa's portfolio consists of an annuity with monthly payments of $1,000 each month for five years…

A: 1. Annuity Component:   - Monthly payments: $1,000   - Duration: 5 years   - Frequency: Monthly (12…

Q: Honesty Company would like to borrow funds from Integrity Company. The risk-free rate is 5% and the…

A: Current inflation rate= 1% Inflation rate in following year = 2% Risk free rate = 5% Margin relevant…

Q: You manage a pension fund that will provide retired workers with lifetime annuities. You determine…

A:

Q: ou are currently 30 years old and have $25,000 saved in an investment account. You plan to add $200…

A: We need to use FV function in excel to calculate amount in account at the time of retirement. The…

Q: uppose you are 35 and have a $105,000 face amount, 15-year, limited-payment, participating policy…

A: Future value helps people and companies in making financial choices by evaluating the future growth…

Q: You plan to start investing into an ETF (SPY) that tracks the S&P 500 index.  You will invest $907…

A: Value in the future is the total value of the investment along with interest earned on the same.…

Q: Immediately after receiving your Biosystems engineering degree, you will be employed by a…

A: 60000 Year

Q: Suppose the asking price for a certain stock is $75 per share, the bid price is $74 per share, the…

A: A forward contract, often known as a forward, is a non-standard contract between two parties to buy…

Q: You manage a pension fund that will provide retired workers with lifetime annuities. You determine…

A: Working Note#1 Calculation of present value of annuity: Present value of annuity=PayoutRate of…

Q: 1. You are selected as an analysis to manage a fixed income portfolio for a client in particular a…

A: Bond refers to the financial instruments which can be issued by an institution for rising public…

Q: Suppose an investor buys 300 stocks for 3 months, the stock price is 10 yuan, and the annual…

A: Given: Spot Price = 10 yuan Interest rate (r)= 5% Time (t) = 3 months Forward price = Spot price *e…

Q: You intend to save for retirement over the upcoming 30 years by allocating R850 monthly to a stock…

A: Variables in the question:Monthly savings to a stock account=R850Monthly savings to a bond…

Q: Suppose you deposit $650 per month in a mutual fund that is expected to bear 10% interest compounded…

A: Future value refers to the concept of time, the value of money used for determining the value of…

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.