Exam 4: Mutual Funds and Other Investment Companies

Assume that you purchased shares of a mutual fund at a net asset value of $14.50 per share.During the year you received dividend income distributions of $0.27 per share and capital gains distributions of $0.65 per share.At the end of the year the shares had a net asset value of $13.74 per share.What was your rate of return on this investment

Which one of the following statements regarding closed-end mutual funds is false

Multiple Mutual Funds had year-end assets of $457,000,000 and liabilities of $17,000,000.There were 24,300,000 shares in the fund at year-end.What was Multiple Mutual's net asset value

A mutual fund had year-end assets of $700,000,000 and liabilities of $7,000,000.There were 40,150,000 shares in the fund at year-end.What was the mutual fund's net asset value

A mutual fund had year-end assets of $250,000,000 and liabilities of $4,000,000.There were 3,750,000 shares in the fund at year-end.What was the mutual fund's net asset value

Which of the following would increase the net asset value of a mutual fund share, assuming all other things remain unchanged

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Russell 2000 should choose

A mutual fund had NAV per share of $36.15 on January 1, 2012.On December 31 of the same year the fund's rate of return for the year was 14.0%.Income distributions were $1.16 and the fund had capital gain distributions of $2.12.Without considering taxes and transactions costs, what ending NAV would you calculate

Discuss the taxation of mutual fund income.

The fee that mutual funds use to help pay for advertising and promotional literature is called a

In 2012 the proportion of hybrid (bond and stock) mutual funds (based on total assets) was

A mutual fund had NAV per share of $23.00 on January 1, 2012.On December 31 of the same year the fund's NAV was $23.15.Income distributions were $0.63 and the fund had capital gain distributions of $1.26.Without considering taxes and transactions costs, what rate of return did an investor receive on the fund last year

A mutual fund had year-end assets of $521,000,000 and liabilities of $63,000,000.If the fund NAV was $26.12, how many shares must have been held in the fund

Jargon Rapid Growth is a mutual fund that has traditionally accepted funds from new investors and issued new shares at net asset value.Jeremy Jargon manages the fund himself and has become concerned that its level of assets has become too high for his management abilities.He issues a statement that Jargon will no longer accept funds from new investors, but will continue to accept additional investments from current shareholders.Which of the following is true about Jargon Rapid Growth fund

Discuss the consistency of mutual fund performance results, as studied by Goetzmann and Ibbotson (1994) and Malkiel (1995).

The Profitability Fund had NAV per share of $17.50 on January 1, 2012.On December 31 of the same year, the fund's NAV was $19.47.Income distributions were $0.75, and the fund had capital gain distributions of $1.00.Without considering taxes and transactions costs, what rate of return did an investor receive on the Profitability Fund last year

A mutual fund had NAV per share of $16.75 on January 1, 2012.On December 31 of the same year the fund's rate of return for the year was 26.6%.Income distributions were $1.79 and the fund had capital gain distributions of $2.80.Without considering taxes and transactions costs, what ending NAV would you calculate

Differences between hedge funds and mutual funds are that

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000.If Pinnacle's NAV was $32.18, how many shares must have been held in the fund

List and describe the more important types of mutual funds according to their investment policy and use.