Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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9. Assume the new investor sells the 420 shares. What is his profit? What is the annualized return The fund sells 800 shares of stock 4 to raise the needed funds. Assume 250 trading days per year. 

6. On December 31 a mutual fund has the following assets and prices at 4:00 p.m.
Calculate the net asset value (NAV) for the fund. Assume that 8,000 shares are outstanding for the fund.
Stock
Shares owned Price
Market Value
1
2
3
4
5
Cash
Total
NAV
1
2
3
4
5
1,000 $
5,000 $
1,000 $
10,000 $
3,000 $
NAV=
119.0475
7. An investor sends the fund a check for $50,000. If there is no front-end load, calculate the new number of shares and price per share. Assume the manager purchases 1,800 shares of stock 3, and the rest is held as cash.
8. On January 2 the prices at 4:00 p.m. are as follows:
Calculate the net asset value (NAV) for the fund.
Stock
n.a.
1.97 $
48.26 $
26.44 $
67.49 $
2.59 $
$
Closing
Outstanding
21,800
1,970
241,300
26,440
674,900
7,770
952,380
8,000
Shares Owned Price
Market Value
1,000 $
2.03 $
5,000 $ 51.37 $
29.08 $
67.19 $
2,800 $
10,000 $
3,000 $
$
4.42 $
2,408 $
$
$
2,030
256,850
81,424
671,900
13,260
2,408
1,027,872
47.15
9. Assume the new investor sells the 420 shares. What is his profit? What is the annualized return The fund sells 800 shares of stock 4 to raise the needed funds. Assume 250 trading days per year.
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Transcribed Image Text:6. On December 31 a mutual fund has the following assets and prices at 4:00 p.m. Calculate the net asset value (NAV) for the fund. Assume that 8,000 shares are outstanding for the fund. Stock Shares owned Price Market Value 1 2 3 4 5 Cash Total NAV 1 2 3 4 5 1,000 $ 5,000 $ 1,000 $ 10,000 $ 3,000 $ NAV= 119.0475 7. An investor sends the fund a check for $50,000. If there is no front-end load, calculate the new number of shares and price per share. Assume the manager purchases 1,800 shares of stock 3, and the rest is held as cash. 8. On January 2 the prices at 4:00 p.m. are as follows: Calculate the net asset value (NAV) for the fund. Stock n.a. 1.97 $ 48.26 $ 26.44 $ 67.49 $ 2.59 $ $ Closing Outstanding 21,800 1,970 241,300 26,440 674,900 7,770 952,380 8,000 Shares Owned Price Market Value 1,000 $ 2.03 $ 5,000 $ 51.37 $ 29.08 $ 67.19 $ 2,800 $ 10,000 $ 3,000 $ $ 4.42 $ 2,408 $ $ $ 2,030 256,850 81,424 671,900 13,260 2,408 1,027,872 47.15 9. Assume the new investor sells the 420 shares. What is his profit? What is the annualized return The fund sells 800 shares of stock 4 to raise the needed funds. Assume 250 trading days per year.
Expert Solution
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Step 1

 

Annualized return refers to the expected return by the investors on the investment made. It represents the amount of profit to be earned by the investors in a certain period of time.

 

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