B. Investment. An investor has at most $100,000 to invest in government bonds, mutual funds, and money market funds. The average yields for government bonds, mutual funds, and money market funds are 8%, 13%, and 15%, respectively. The investor's policy requires that the total amount invested in mutual and money market funds not exceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximum return?

B. Investment. An investor has at most $100,000 to invest in government bonds, mutual funds, and money market funds. The average yields for government bonds, mutual funds, and money market funds are 8%, 13%, and 15%, respectively. The investor's policy requires that the total amount invested in mutual and money market funds not exceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximum return?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 2FPE

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Situation: I want to invest my 5 million pesos in Mutual funds. Discuss the following: A. Security of MoneyB. Returns on investmentC. Risks involvedD. Impact to government and society Conclusion of Letter A. to D.
1. What is a mutual fund or unit trust? Explain and discuss the business model of mutual funds. What role do they play in the economy, and in the financial sector in particular? 2. A mutual fund has assets of K5 092.2 million and K4.6 million in liabilities with outstanding shares of 150.6 million. Calculate the net asset value (NAV) of the portfolio. 3. Another mutual fund manages a portfolio of securities of K120 million. The fund owes K4 million to advisers and a further K1 million for running expenses and has 5 million shares outstanding. Calculate the net asset value.
An investor has at most $10,000 to invest in government bonds, mutual funds, and money market funds. The average yields for the government bonds, mutual funds, and money market funds are 8%, 7%, and 13% respectively. The investor's policy requires that the total amount invested in mutual and money market funds not exceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximum return in the first year? How much should be invested in government bonds? How much should be invested in mutual funds? How much should be invested in money market funds? What is the maximum return in the first year?
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An investor purchases a mutual fund share for $100.2. The fund pays dividends of $2.2, distributes a capital gain of $1.1, and charges a fee of $3 when the fund is sold one year later for $95.3. What is the net rate of return from this investment? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
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4. CMD Asset Management has the following fee structure for clients in its equity fund: 1.00% of first $5 million invested 0.75% of next $5 million invested 0.60% of next $10 million invested 0.40% above $20 million a. Calculate the annual dollar fees paid by Client 1, who has $27 million under manage- ment, and Client 2, who has $97 million under management. b. Calculate the fees paid by both clients as a percentage of their assets under management. c. What is the economic rationale for a fee schedule that declines (in percentage terms) with increases in assets under management?
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1. Computing the net asset value of a mutual fund investment Most mutual funds invest money in hundreds of stocks, bonds, short-term securities, or other securities and assets; then, shares of the funds themselves are sold to individual investors. To understand how the value of a mutual fund’s share is calculated based on the values of the assets it holds, consider the following simplified example of a mutual fund that owns shares of only four different stocks. Stock Symbol Current Market Price Number of Shares Total Value of Shares GlbEx $98.32 950 $93,404.00 TmRE 17.77 1,150 20,435.50 PFIN 70.81 850 60,188.50 BRRT 35.21 1,150 40,491.50 You can see from the table that the market value of the fund’s assets is ____ ? If the fund has $10,725.98 in liabilities and 6,000 shares outstanding, the net asset value (NAV) of a share in this mutual fund is ________?