1)The twenty-first century closed-end fund has GHS350 million in securities, GHS8 million in liabilities and 20 million in shares outstanding. It trades at a 10% discount from net asset value (NAV) a)What is the net asset value of the fund? b)What is the current price of the fund? c)Suggest two reasons why the fund may be trading at a discount from net asset value.

1)The twenty-first century closed-end fund has GHS350 million in securities, GHS8 million in liabilities and 20 million in shares outstanding. It trades at a 10% discount from net asset value (NAV) a)What is the net asset value of the fund? b)What is the current price of the fund? c)Suggest two reasons why the fund may be trading at a discount from net asset value. 2)The new pioneer closed-fund has GHS520 million in securities, GHS5 in liabilities, and 10 million shares outstanding. It trades at a 5% premium above its net asset value (NAV). a)What is the net asset value of the fund? b)What is the current price of the fund? c)Why might a fund trade at a premium above its net asset value? 3)In problem 2, if new pioneer converted to an open-end fund trading at its net asset value with a 6% load (commission), what would its purchase price be? 4)In problem 2, if new pioneer converted to an open end fund and traded at GHS1.50, would it be a load or no load fund? 5)An open-end fund is set up to charge a load. Its net asset value is GHS8.72 and its offer price is GHS9.25 a)What is the cedi value of the load (commission)? b)What percentage of the offer price does the load represent? c)What percentage of the net asset value does the load represent? d) Do load funds necessarily outperform no-load funds? e)How do no-load funds earn a return if they not charge a commission? 6)In problem 5, assume the fund increased in value by GHS0.30 the first month after you purchased 300 shares a)What is your total cedi gain or loss? (compare the total current value with the total purchase amount) b)By what percentage would the net asset value of the shares have to increase for you to break even? 7)a) If you purchased a low load fund at GHS10.30 and it had a net asset value of GHS10.00, what is the percentage load? b) If the fund’s net asset value went up 33.72%, what would its new net asset value be? c) What is your cedi profit or loss per share based on your purchase price? d) What is your percentage return on your purchase price? 8)An investor buys Go-Go Mutual Fund on January 1 at a net asset value of GHS21.20. At the end of the year, the price is GHS25.40. Also, the investor receives GHS0.50 in dividends and GHS0.35 in capital gains distributions. What is the total percent return on the beginning net asset value? 9)Kofi purchases the UGBS Fund at a net asset value of GHS11.25. During the year, he receives GHS0.50 in dividends and GHS0.14 in capital gains distributions. At the end of the year, the fund’s price is GHS10.90. What is the total percentage return or loss on the beginning net asset value? 10)Alice had 200 shares of the ABC Fund on January 1. The shares had a value of GHS17.60. During the year, she received GHS90 in dividends and GHS270 in capital gains distributions. She used the funds to purchase shares at an average price of GHS18 per share. By the end of the year, the shares went up to GHS18.50. What is her percentage total return? 11)Tom had 300 shares of the XYZ Fund on January 1. The shares had a value of GHS23. During the year, he received GHS150 in dividends and GHS450 in capital gains distributions. He used the funds to purchase shares at an average price of GHS25 per share. By the end of the year, the shares were all up to GHS27. What is the percentage of his total return? 12)Under dollar-cost averaging (cedi cost averaging), an investor will purchase GHS6,000 worth of stock each year for three years. The stock price is GHS40 in year 1, GHS30 in year 2, and GHS48 in year 3. i)Compute the average price per share. ii) Compute the average cost per share. iii) Explain why the average cost is less than the average price 13)A Fund is set up to charge a load. Its net asset value is GHS16.50 and its offer price is GHS17.30. a. What is the cedi value of the load (commission)? b. What percentage of the offer price does the load represent? c. What percentage of the net asset value does the load represent? d. Assume the fund increased in value by 30 pesewas the first month after you purchase 100 shares. What is the total dollar gain or loss? (Compare the total current value with the total purchase amount.) e. By what percentage would the net asset value of the shares have to increase for you to break even? 14)UGBS buys shares in the no-load Fund on January 1 at a net asset value of GHS32.60. At the end of the year the price is GHS36.90. Also, the investor receives 90 pesewas in dividends and 50 pesewas in capital gains distributions. What is the total percentage return on the beginning net asset value? 15)Consider the following data on two mutual funds: Fund A Fund B Total net assets (assets less Liabilities) at beginning of year ¢ 1,000,000 ¢ 1,000,000 Number of shares outstanding at 100,000 100,000 beginning of year Annual operating expenses ¢ 10,000 ¢ 12,000 Value of securities sold during year ¢ 500, 000 ¢ 800,000 Value of securities purchased during ¢ 400,000 ¢ 900,000 year Brokerage fees for the year ¢ 9,000 ¢ 17,000 Number of shares outstanding at 110,000 100,000 end of year Total net assets end of year ¢1,100,000 ¢ 1,200,000 For each fund, calculate the following: i.The NAVs per share at the beginning and end of the year. Assume that operating expenses and brokerage fees are reflected in the NAVs. ii.The expense ratios, using the NAVs at the beginning of the year. iii.The portfolio turnover ratios. iv.Do you think the higher operating expenses for Fund B are justified? Explain your answer v.Do you think the higher portfolio turnover ratio and brokerage fees for Fund B are justified? Explain your answer. 16)Consider these data from the 2013 balance sheet of Vanguard’s Global Equity Fund. What was the net asset value of the fund? Assets: ¢ 3,035.74 million Liabilities: ¢ 83.08 million Shares: ¢ 281.69 million 17)Open-end equity mutual funds find it necessary to keep a significant percentage of total investments, typically around 5% of the portfolio, in very liquid money market assets. Closed-end funds do not have to maintain such a position in “cash equivalent” securities. What difference between open-end and closed-end funds might account for their differing policies? 18)An open-end fund has a net asset value of GHS11.00 per share. It is sold with a front-end load of 6%. What is the offering price? 19)If the offering price of an open-end fund is GHS13.30 per share and the fund is sold with a front-end load of 5%, what is its net asset value? 20)Corporate fund started the year with a net asset value of GHS12.25. By year-end, its NAV equaled GHS12.10. The fund paid year-end distributions of income and capital gains of GHS1.50. What was the (pretax) rate of return to an investor in the fund? 21)Consider a mutual fund with GHS200 million in assets at the start of the year and with 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of GHS2 million. The stock included in the fund’s portfolio increase in price by 8%, but no securities are sold, and there are no capital gains distributions. The fund charges 12b-1 fees of 1%, which are deducted from portfolio assets at year-end. What is net asset value at the start and end of the year? What is the rate of return for an investor in the fund? You purchased 1,000 shares of the New fund at a price of GHS20 per share at the beginning of the year. You paid front-end load of 4%. The securities in which the fund invests increase in value by 12% during the year. The fund’s expense ratio is 1.2%. What is your rate of return on the fund if you sell your shares at the end of the yea