17. A closed-end fund starts the year with a net asset value of $12. By year-end, NAV equals $12.10. At the beginning of the year, the fund is selling at a 2% premium to NAV. By the end of the year, the fund is selling at a 7% discount to NAV. The fund paid year- end distributions of income and capital gains of $1.50. (LO 4-3) a. What is the rate of return to an investor in the fund during the year? b. What would have been the rate of return to an investor who held the same securities as the fund manager during the year?

You pay $21,600 to the Laramie Fund, which has an NAV of $18 per share at the beginning of the year. The fund deducted a front-end load of 4% at the time of the purchase. The securities in the fund then increased in value by 10% during the year. The fund's expense ratio is 1.3% and is deducted from year-end asset values. What is your rate of return on the fund if you sell your shares at the end of the year? Select the answer closest to the correct return. (Hint: The formula on slide #23 in the "Mutual Funds, ETFs, ..." slide set solves for the gross return. Your rate of return would be the gross return minus 1. The formula on slide # 23 can be written as X(1-f)(1+r-a)" (1-b) Gross Return = (1 - f)(1+r-a)" (1-b) or as Gross Return = X where X is the dollar amount invested. The other variables in the formula (f, r, a, n, b) are all defined in the slide set and in the lecture.) 4.2% 10% 8.7% O 4.7%

You have $5,000 to invest You are comparing two investment funds. Fund A returns 4%/yr compounded monthly Fund B returns 4.05% compounded quarterly. Which should you choose and why?

Kenny decided to make a P1,000 monthly deposit in a fund that pays 6% compounded quarterly. How much will be in the fund after 15 years? a. P290,082.51 b. P118,729.52 c. P290,785.62 d. P199,567.25

Red Company invested $20,000 in a fund that was earning interest at a rate of 3.00% compounded semi-annually. After 2 years and 9 months, the company transferred these funds to another investment that was earning interest at 5.50% compounded monthly.

B 2. Deposits of $6000 are made every 6 months into a fund starting today and continuing until 10 deposits have been made. Six months after the last deposit, there is $70 630 in the fund. What nominal rate of interest, j2, do the deposits earn?

A company has $44,000 today to invest in a fund that will earn 4% compounded annually. How much will the fund contain at the end of 6 years? (PV of $1 EV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $55,673 $45,760 $55,550 $54,560 $59,862

Vijay

H10.

What are the After-tax annualized returns from the following two funds if you invest $1000 in each of them? Assume: You invest for 4 years (hold investments till end of 4th year) and sell your shares at the beginning of 5th year. Tax rate is 25%. Fund B: Distributes 5% Distributed Income return per period. Provides 5% Capital Gain Return Per Period.