You must choose between a no-load, open-end mutual fund with an annual expense ratio of 0.85 percent but no transaction cost or an ETF with an annual expense ratio of 0.25 percent and a transaction cost of $20.00. a. Calculate which is the lower cost alternative to purchase. b. Calculate which is the lower cost to own over 6 months, if you sell after 7 percent gain. c. Calculate which is the lower cost to own over 2 years, if you achieve a 10 percent per year gain.

You must choose between a no-load, open-end mutual fund with an annual expense ratio of 0.85 percent but no transaction cost or an ETF with an annual expense ratio of 0.25 percent and a transaction cost of $20.00. a. Calculate which is the lower cost alternative to purchase. b. Calculate which is the lower cost to own over 6 months, if you sell after 7 percent gain. c. Calculate which is the lower cost to own over 2 years, if you achieve a 10 percent per year gain.

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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2
If you have a 5.75% back-load charge and you invest $4,000, how much of this money will be invested in the mutual fund? Amount invested in the mutual fund:
Consider the following information for the Alachua Retirement Fund, with a total investment of $4 million. The market required rate of returnis 12%, and the risk-free rate is 6%. What is its required rate of return? Stock Investment Beta A $500,000 1.2 B 500,000 -0.4 C 1,000,000 1.5 D 2,000,000 0.8 Total 4,000,000 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Pls help in this finance question
Here’s an example of how breakpoint discounts on sales commissions for mutual fund investors work: Sales charge Less than $25,000, 6% $25,000 to $49,999, 5.75% $50,000 to 99,999, 5% $100,000 to $249,999, 4% Nancy Dolan is interested in the T Rowe Price Mid Cap Fund. Assume the NAV is 19.06. Here is what we need to find out: A.)What minimum amount of shares must Nancy purchase to have a sales charge of 5.75%? B.) What minimum amount of shares must nancy purchase to have a sales charge of 5%? (round up to the nearest share even if it is less than 5) C.)What minimum amount of shares must Nancy purchase to have a sales charge of 4%?(Round up to the nearest share even if it is less than 5) D.) Then, find out what the total purchase price for A, B and C.
Here’s an example of how breakpoint discounts on sales commissions for mutual fund investors work: Sales charge Less than $25,000, 5.25%$25,000 to $49,999, 5%$50,000 to 99,999, 4.25%$100,000 to $249,999, 3.25% Nancy Dolan is interested in the T Rowe Price Mid Cap Fund. Assume the NAV is 19.21. a. What minimum amount of shares must Nancy purchase to have a sales charge of 5%? (Round up to the nearest share even if it is less than 5.) Minimum Amount of Shares: b. What minimum amount of shares must Nancy purchase to have a sales charge of 4.25%? (Round up to the nearest share even if it is less than 5.) Minimum Amount of Shares: c. What minimum amount of shares must Nancy purchase to have a sales charge of 3.25%? (Round up to the nearest share even if it is less than 5.) Minimum Amount of Shares: d. What would be the total purchase price for (a), (b), or (c)? (Round your answers to the nearest cent.) Total Purchase Price: a) b) c)
If a mutual fund's net asset value is $23.30 and the fund sells its shares for $25.00, what is the load fee as a percentage of the net asset value? Round your answer to two decimal places.....%
An investor has $80,000 to invest in a CD and a mutual fund. The CD yields 8% and the mutual fund yields 7%. The mutual fund requires a minimum investment of $9,000, and the investor requires that at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in CDs and how much in the mutual fund to maximize the return? What is the maximum return? To maximize income, the investor should place $ in CDs and $ in the mutual fund. (Round to the nearest dollar as needed.)
a. You expect a tax-free municipal bond portfolio to provide a rate of return of 4.5%. Management fees of the fund are 0.65%. What fraction of portfolio income is given up to fees? (Round your answer to 1 decimal place.) Bond fund b. If the management fees for an equity fund also are 0.65%, but you expect a portfolio return of 17.0%, what fraction of portfolio income is given up to fees? (Round your answer to 1 decimal place.) Equity fund % O Bond fund O Equity fund % c. For which fund might management fees be a bigger factor in your investment decision?
Here’s an example of how breakpoint discounts on sales commissions for mutual fund investors work: Sales charge Less than $25,000, 5.75% $25,000 to $49,999, 5.50% $50,000 to 99,999, 4.75% $100,000 to $249,999, 3.75%= Nancy Dolan is interested in the T Rowe Price Mid Cap Fund. Assume the NAV is 19.43. a. What minimum amount of shares must Nancy purchase to have a sales charge of 5.50%? (Round up to the nearest share even if it is less than 5.) What the minuim amount of shares? b. What minimum amount of shares must Nancy purchase to have a sales charge of 4.75%? (Round up to the nearest share even if it is less than 5.) What the minum amout of shares? What minimum amount of shares must Nancy purchase to have a sales charge of 3.75%? (Round up to the nearest share even if it is less than 5.) What the minuim amout of shares? What would be the total purchase price for (a), (b), or (c)? (Round your answers to the nearest cent.) Total Purchase Price for A B C
You are considering purchasing a no - load mutual fund with an operating expense of .4% and a 12 b-1 expense of .25% . You are also considering purchasing a CD paying 3.0% per year. What minimum annual rate of return must the fund earn to make you better off in the fund versus the CD Group of answer choices 3.65 % 3.0 % 2.35% 3.4%
Consider a no-load mutual fund with $325 million in assets and 13 million shares at the start of the year and with $375 million in assets and 14 million shares at the end of the year. During the year investors have received income distributions of $3 per share and capital gain distributions of $0.20 per share. Assuming that the fund carries no debt, and that the total expense ratio is 2%, what is the rate of return on the fund? Multiple Choice 16.95% 17.80% 26.45% The answer cannot be determined from the information given.

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