EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 8, Problem 28P
Summary Introduction
To discuss: The best performing mutual funds based on Website B and whether the ranking based on last month is consistent with last year’s ranking of funds.
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which of the following past returns should mutual funds publish in their annual reports?
A.Excess return
B.Geometric average return
C.Arithmetric average return
D.Index return
Analyze the following three years of data relating to the MoMoney Mutual Fund, . It should report the
amount of dividend income and capital gains distributed to the shareholders, along with any other
changes in the fund's net asset value (b = 0.5).
(Click the icon here ☐ in order to copy the contents of the data table below into a spreadsheet.)
2019
2018
NAV (beginning of period)
?
?
2017
$35.56
Net investment income
0.64
0.74
0.56
Net gains on securities
5.48
4.52
- 3.41
Dividends from net investment income
0.64
0.56
Distributions from realized gains
1.61
1.96
0.51
1.44
a. What is the total income from the investment operations?
b. What are the total distributions from the investment operations?
a. The total income from investment operations in 2019 is $
The total income from investment operations in 2018 is $
(Round to the nearest cent.)
(Round to the nearest cent.)
(Round to the nearest cent.)
The total income from investment operations in 2017 is $
b. The total distributions from…
Which time period should investors use when comparing mutual funds? Latest one-year return,
ending the most recent month end Latest five-year return, ending the most recent Dec31Latest one-
year return, ending the most recent Dec31 No specific time period is necessarily better than any other
Chapter 8 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 8 - Prob. 1QTDCh. 8 - Prob. 2QTDCh. 8 - Prob. 3QTDCh. 8 - Prob. 4QTDCh. 8 - Prob. 5QTDCh. 8 - Prob. 6QTDCh. 8 - Prob. 7QTDCh. 8 - Prob. 8QTDCh. 8 - Prob. 9QTDCh. 8 - Prob. 10QTD
Ch. 8 - Prob. 11QTDCh. 8 - Prob. 12QTDCh. 8 - Prob. 13QTDCh. 8 - Prob. 14QTDCh. 8 - Prob. 15QTDCh. 8 - Prob. 16QTDCh. 8 - Prob. 17QTDCh. 8 - Prob. 18QTDCh. 8 - Prob. 19QTDCh. 8 - Prob. 20QTDCh. 8 - Prob. 21QTDCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28P
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- You have been given the following return information for two mutual funds (Papa and Mama), the market index, and the risk-free rate. Year Papa Fund Mama Fund Market Risk-Free 2011 –12.6 % –22.6 % –24.5 % 1 % 2012 25.4 18.5 19.5 3 2013 8.5 9.2 9.4 2 2014 15.5 8.5 7.6 4 2015 2.6 –1.2 –2.2 2 Calculate the Sharpe ratio, Treynor ratio, Jensen’s alpha, information ratio, and R-squared for both funds. (Input all amounts as positive values. Do not round intermediate calculations. Enter all answers as a decimal value rounded to 4 decimal places.) PAPA MAMA SHARPE RATIO: TREYNOR RATIO JENSEN'S ALPHA INFORMATION RATIO R-SQUAREDarrow_forward● Following results were obtained for the period of six months ending September 2022. Birla Sundaram Sun Nifty Rf Rp 25.38 36.28 45.56 36.74 9.00 Sigma 4.0 6.86 4.31 3.69 Beta 0.23 0.52 0.63 1.00 Using inputs, rank the funds according to the predictive ability of the fund's manager.arrow_forwardAn investor wants to select one of the six mutual funds for the coming year. Data showing the percentage annual return for each fund during five typical one year periods are shown here (hence five outcomes): Outcomes Year A Year B Year C Year D Year E Mutual Fund 38.5 24.0 29.6 11.2 -12.1 Large Cap 34.6 25.9 -0.7 51.2 -23.7 Mid Cap 22.4 26.7 4.8 36.9 7.4 Small Cap 48.7 3.5 30.6 78.9 -34.5 Health Sector 26.5 41.9 -30.1 22.2 16.7 Tech Sector 47.8 38.2 2.2 -16.8 95.4 a) Assume the investor is conservative, what is the recommended fund? What are the maximum and minimum returns of your decision? b) Suppose we were given the probabilities of 0.1, 0.2, 0.2, 0.1, and 0.4. Using the expected value table what is the recommended mutual fund? What is the expected return? c) What is the EMV for the fund in part A? How much of an increase can be obtained by following the…arrow_forward
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