A pension fund is investing $60 million in a well-diversified equity portfolio E and $30 million in a well-diversified bond portfolio B. Total assets under management (portfolio of E and B) has expected return of 8% and standard deviation of 5%. Recently, the fund acquired new capital of $10 million and will use it to invest in a Cryptocurrency portfolio C. C is known to have expected return of 12% and standard deviation of 10%. Also, it is known that the covariance between E and C is 0.8% and the covariance between B and C is 0.4%. What would be the expected return and the standard deviation of the total assets under management (portfolio of E, B and C) when the fund makes this new investment?

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.

C Corp. faces a marginal tax rate of 35 percent. One project that is currently under evaluation has a cash flow in the fourth year of its life that has a present value of $10,000 (after-tax). C Corp. assumes that all cash flows occur at the end of the year and the company uses 11 percent as its discount rate. What is the pre-tax amount of the cash flow in year 4? (Round to the nearest dollar.) *   A. $15,181 B. $23,356 C. $9,868 D. $43,375

Mutual funds can be classified basing on execution and operations or basing on yield and investment pattern, briefly describe the classification of mutual funds from these two basis 28. With examples, briefly discuss the importance of mutual funds to an economy 29. Akiba Unit Trust Fund has a prospective average annual return of 8% over the next 20 years. Estimate the value of a Tshs 20,000,000 investment after 20 years when the returns are i. Tax-free, (3 Marks) ii. Subject to a deferred tax of 30% iii. Subject to an annual tax of 25%  30. Briefly analyze the difference between defined benefit plan and defined contribution plan as applied in the pension funds 31. Mr Domokaya works as Director of finance in TPL Ltd a publicly owned institution where He earns a salary of Tshs 6,000,000 per month. Mr Domokaya expects to hold that position for the next 40 years before retirements. After retirement, Mr Domokaya expects to live for further 30  years. Mr Domokaya wishes to…

Consider a mutual fund that manages a portfolio of securities worth $120 million.Suppose  the fund owes $4 million to its investment advisers and owes another $1million for rent, wages due, and miscellaneous expenses.The fund has 5 million shareholders.What is the Net Asset Value?

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 15% 9% stock fund (S) Bond fund (B) The correlation between the fund returns is 0.15. 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% 12.42% 21.37%

Mr. Devine is a fixed-income portfolio manager. He forecast a cash outflow of $10 million in June and plans to sell his baseline bond portfolio. The fund currently is worth $10 million, has an “A” quality rating, duration of 7 years, weighted average maturity of 15 years, annual coupon rate of 10.25%, and YTM of 10.25% (note: the fund is selling at its par value). Suppose Mr. Devine is afraid that long-term interest rates could increase and decides to hedge his June sale by taking a position in June T-bond futures contracts when the June T-bond contract is trading at 80-16, and the T-bond most likely to be delivered on the contract has a YTM of 9.5%, maturity of 15 years, and a duration of 9 years （1）Using the price-sensitivity model, show how Mr. Devine could hedge his June bond portfolio sale against interest rate risk. （2）Suppose long-term interest rates increase over the period such that at the June expiration, Mr. Devine’s baseline portfolio (A-rated, 10.25% coupon rate, 15-year…