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?
Q: Tannen Industries is considering an expansion. The necessary equipment would be purchased for $14…
A: This is a case of capital budgeting. In capital budgeting initial outlay is the amount of initial…
Q: Calculate the value of each of the bonds shown in the following table, all of which pay interest…
A: Bonds are fixed-income assets that serve as a representation of investor loans to borrowers…
Q: You are evaluating a project that requires an initial investment of $1,000,000.00. During the first…
A: The IRR of a project refers to the maximum return that the project can attain while remaining…
Q: A bond has a coupon rate of 9% term fo maturity of 5 years and par value of RM 1000. The coupon is…
A: Bonds: Bonds are debt instruments issued by companies to borrow funds from the public at large. They…
Q: Management is trying to decide whether or not to build a new factory. They believe sales are…
A: Net present value is helpful in decision-making for investors by estimating the viability of the…
Q: Your client has $104,000 invested in stock A. She would like to build a two-stock portfolio by…
A: Expected rate of return of the portfolio depends on weight of stocks in the portfolio and standard…
Q: Find the equivalent interest rates for the following: (a) Nominal interest rate compounded quarterly…
A: The nominal interest rate refers to the rate that does not take into consideration the effects of…
Q: On January 1, 2024, White Water issues $490,000 of 8% bonds, due in 15 years, with interest payable…
A: A bond is a kind of debt security issued by the government and private companies for raising funds…
Q: For each of the cases shown in the following table, calculate the present value of the cash flow,…
A: Present value of a single cash flow expected at the end of period n is calculated using following…
Q: Appa deposits $4000 in an account earning 2.9% interest compounded monthly. How much will Appa have…
A: Nominal rate 2.90% Compounding Monthly Effective annual rate ((1+2.9%/12)^12)-1) Effective…
Q: Which of the following statements is INCORRECT? 1. Black-Scholes model assumes that the yield…
A: The Black-Scholes model makes several assumptions about the underlying asset and the market in which…
Q: What is the NPV of the following cashflows, assuming a discount rate of 12%? Year Cashflow 0…
A: Net present value (NPV) is a financial metric that is used to evaluate the profitability of an…
Q: Should we use (1) total sales, (2) EBITDA, (3) EBIT, or (4) net income to evaluate firm…
A: The choice of financial performance indicators to use depends on the specific goals and…
Q: Which of the following portfolios of two assets would be preferred by a risk averse investor OA.…
A: Several portfolios with their characteristics have been listed. We have to find the one that would…
Q: Three years ago, Mariam purchased a 30-year bond paying 4.75% annual interest. She now sees…
A: Risk means the uncertainty and potential for financial loss or negative outcomes associated with an…
Q: 5) Brady Brand is evaluating a project with the given cash flow and weighted average cost of capital…
A: MIRR is a Capital budgeting techniques which help in decision making on the basis of future cash…
Q: A car manufacturer is offering the choice of a 0.5% loan compounded monthly for 72 months or $2000…
A: The sum borrowed or loan taken to meet the specific business or personal requirements is regarded as…
Q: We have discussed and used various methods to value projects. Three of them are net present value…
A: Capital budgeting is a project evaluation methodology that helps a business to assess potential…
Q: Lacy has a $40,500.00 student loan when she graduates on May 4, and the prime rate is set at 5.5%.…
A: A student loan refers to a loan that is extended only to students to finance their education fees.…
Q: For its fabricated metal products, the Able Corp. is paying $10,000 for special tools that have a…
A: Value of equipment decreases with time and use of equipment but the decrease in value depends on the…
Q: Rachel died in 2023 and her executor is finalizing her estate tax return. The executor has…
A: Estate tax planning refers to designating the successor or nominee for one's estate after their…
Q: An amount of 1200 per year is to be paid into an account each for the next five years. Using an…
A: Annual deposit = $1200 Interest rate = 12% compounded quarterly Period - 5 years
Q: (i) Calculate the payback period. Year Cash Flow Cumulative Cash Flow $ Note: Copy the above table…
A: This pertains to capital budgeting. We will use capital budgeting tools to determine the financial…
Q: An investor can choose between two investment opportunities. Option 1: pay £70 to purchase a bond…
A: We need to calculate price of zero coupon bond by using equation below. Zero coupon bond price =…
Q: A $94,000 mortgage is to be amortized by making monthly payments for 20 years. Interest is 7.8%…
A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…
Q: You wish to compute a firm's sustainable growth rate from its accounting statements. To do so, you…
A: The maximum rate of growth that a business or social enterprise may sustain without using more…
Q: Titan SpA’s net income for the most recent year was €4,850. The tax rate was 33 per cent. The firm…
A: The cash coverage ratio is one of the financial ratios that is used to evaluate a company's cash…
Q: Marcus is trying to decide which checking account to open. Bank A's account pays 1.6%, compounded…
A: When the bank borrows money from the depositors which is said to be the deposited fund by the…
Q: How much would you have to deposit today to be able to withdraw $1,000 EACH year forever. You…
A: Annual payment = p = $1000 Interest rate = r = 4% Time = Forever
Q: Your company is planning to purchase a new log splitter for its lawn and garden business. The new…
A: Payback period is the time taken to recover the initial investment of a project. The payback…
Q: ms castro plans to invest 100,000 at 12 1/2% simple interest for three years. At what rate…
A: Interest is the amount of money charged or earned for the use of money by the money holder,…
Q: The image below shows the Sales History worksheet. The following HLOOKUP function was entered into…
A: The HLOOKUP function in Excel is a lookup function that searches for a specific value in the top row…
Q: Describe the difference between business risk and financial risk using appropriate example
A: Business risk refers to the potential for a company to experience a loss or lower profits due to…
Q: Assume that a firm has Sales of $25,000,000, total assets of $20,000,000, current assets of…
A: AFN is usually raised by outside sources of funding. Increase in business implies increase the…
Q: 5. A firm evaluates all of its projects by applying the NPV rule. A project under consideration has…
A: The calculation of Net present value involve considering all the present value of cash inflow and…
Q: What iS the fair market price today for an annuity that pays you $350 at the beginning of each month…
A: Annuity refers to the series of payment at regular interval for certain period.
Q: Play Products is considering producing toy action figures and sandbox toys. The products require…
A: Payback period is a financial metric used to calculate the amount of time it takes for an investment…
Q: New Energy Corp is a private company that imports lithium, copper and nickel for electric car…
A: Free cash flow refers to the cash generated by the company after accounting for the non-cash…
Q: 1. Various financial instruments usually serve one of two distinct purposes: to store value or to…
A: Finance is a vital aspect of our daily lives, as it affects our ability to manage and utilize money…
Q: Hornby Corporation is in a 34 percent federal income tax bracket and a 6 percent state income tax…
A: After tax return of a totally tax-free municipal fund has to be determined.
Q: Bones Ely owns a $1,000 face-value bond with three years to maturity. The bond makes annual interest…
A: First we need to calculate bond price. Bond price will be present value of face value and present…
Q: PS Inc. wishes to estimate its cost of retained earnings. The firm's beta is 1.21. The rate on…
A: The cost of retained earnings is the rate of return that a company must offer to its shareholders to…
Q: Two 30-year maturity mortgage-backed bonds are issued. The first bond has a par value of $10,000 and…
A: The initial price of a bond is the price at which a bond is first issued and sold to investors by…
Q: an to invest $1,000 at the end of EVERY year for the next 25 years. You believe you can earn 7%…
A: Money has time value and value of money changes with time and interest and inflation. The purchasing…
Q: You are doing a special project for the boss and he is going to give you a $5,000 bonus when it is…
A: When you put money in bank accounts than money growth with time due to compounding of interest and…
Q: Regarding the following statements about credit fixed income, identify who is correct (select all…
A: The question was related to credit fixed income and involved four different statements, each made by…
Q: Suppose you want to have $500,000 for retirement in 30 years. Your account earns 9% interest. How…
A: Compound = monthly = 12 Future value = fv = $500,000 Time = t = 30 * 12 = 360 months Interest rate…
Q: Miguel had a loan of $56,000 and made payments of $3,250 at the end of every three months to settle…
A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…
Q: The following are the prices of $1000 par value zero-coupon bonds with one and two year naturities:…
A: As per the given information: Par value - $1000 Zero-coupon bond with one-year maturity - $950…
Q: A promissory note will pay $52,000 at maturity 8 years from now. If you pay $25,000 for the note…
A: A promissory note is a written promise made by one party (the "issuer" or "maker") to pay a specific…
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?
Step by step
Solved in 3 steps with 2 images
- Consider a mutual fund that manages a portfolio of securities worth Php240 million. Suppose the fund owes Php8 million to its investment advisers and owes another Php2 million for rent, wages due, and miscellaneous expenses. The fund has 10 million shareholders. What is the net asset value per share?An Investment fund has $2 million in cash and $8 million Invested in securities. It currently has 2 million shares outstanding. a. What is the NAV of this fund? (Round your answer to 2 decimal places. (e.g., 32.16)) b. Assume that some of the shareholders decide to cash in their shares of the fund. How many shares, at its current NAV, can the fund take back without resorting to a sale of assets? c-1. As a result of anticipated heavy withdrawals, it sells 24,000 shares of IBM stock currently valued at $35. Unfortunately, It receives only $32 per share. What is the net asset value after the sale? (Round your answer to 2 decimal places. (e.g., 32.16) c-2. What are the fund's cash assets after the sale? (Enter your answers in millions rounded to 2 decimal places. (e.g., 32.16)) d-1. Assume after the sale of IBM shares, 200,000 shares are sold back to the fund. What is the current NAV? (Do not round Intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) d-2. Is…Suppose you own a mutual fund which has 11,326,555 shares outstanding. If its total assets are $70,111,050 and its liabilities are $12,444,100, find the net asset value of the fund.
- The Closed Fund is a closed-end investment company with a portfolio currently worth $200 million. It has liabilities of $3 million and 5 million shares outstanding.a. What is the NAV of the fund?b. If the fund sells for $36 per share, what is its premium or discount as a percent of net asset value?An investor has $80,000 to invest in Certificates of Deposit (CD) and a mutual fund. The CD yields 7% and the mutual fund yields 8%. The mutual fund requires a minimum investment of $8,000 and the investor requires at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in each to maximize the return? What is the maximum return? Show your work and explanations setting this problem up. Variables should clearly be defined. Show all your work.A mutual fund has assets of $50 million and liabilities of $150000 and 1 million shares outstanding.What Is the net asset value for the fund?Enter your answer to the nearest cent( two decimal places)
- Net asset value (NAV) of an investment fund is calculated as total portfolio value divided by number of fund shares. Accordingly, if the total portfolio value is 100.000 $ and the number of shares is 55.000, then the NAV would be 100.000 $/55.000 = 1,818 S. Now, suppose that you are a portfolio manager of a bond fund that has 20.000 fund shares outstanding. You consider 3 investments for your portfolio: (a) A T-bill that has a 194 day maturity with a face value of 10.000 $. (b) A zero-coupon bond that has a 10 year maturity with a face value of 100.000 $. (c) A bond that pays quarterly coupon payments with an annual coupon rate of 12%, a face value of 50.000 $ and a maturity of 5 years. You know that the annual market yields are 10%. If you invest them all right now, what would be the NAV of your fund at the time of investment? (1 year = 360 days)Calculate the NAV for a mutual fund with the following values: Market value of securities held in the portfolio = $1.2 billion Liabilities of the fund = $47 million Shares outstanding = 70 million The NAV per share is ?City Street Fund has a portfolio of $450 million and liabilities of $10 million.a. If 44 million shares are outstanding, what is net asset value?b. If a large investor redeems 1 million shares, what happens to the (i) portfolio value, (ii) shares outstanding, and (iii) NAV?
- The Closed Fund is a closed-end investment company with a portfolio currently worth $245 million. It has liabilities of $12 million and 17 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) b. If the fund sells for $10 per share, what is its premium or discount as a percent of net asset value? (Input the amount as a positive value. Round your answer to 2 decimal places.)The Closed Fund is a closed-end investment company with a portfolio currently worth $190 million. It has liabilities of $8 million and 10 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) NAV b. If the fund sells for $15 per share, what is its premium or discount as a percent of net asset value? (Input the amount as a positive value. Round your answer to 2 decimal places.) of %Cognana fund has 9.8 million shares outstanding. The fund’s portfolio is now valued at $500 million, and the fund owes $16 million to the fund advisors and $8 million against rent and wages. How would you calculate the net asset value of the fund?