Homework problems Investment Management (Finance) 2

Ch

. 4 & 5 Problem Quest

ions

Ch. 4

8. Turnover (LO2, CFA3)

A mutual fund sold $36 million of assets during the year and

purchase

d $32 million in assets. If the average daily assets of the fund were $96 million,

what

was the fund turnover?

9. Closed

-

End Funds (LO2, CFA2)

A closed

-

end fund has total assets of $240 million and

liabilities of $110,000. Currently, 11 million shares are

outstanding. What is the NAV of the

fund? If the shares currently sell for $19.25, what is the premium or discount on the fund?

10. Mutual Fund Returns (LO2, CFA1)

You invested $10,000 in a mutual fund at the

beginning

of the year when the NAV was $32.24.

At the end of the year the fund paid $.24 in

short

-

term

distributions and $.41 in long

-

term distributions. If the NAV of the fund at the end of

the year

was $35.23, what was your return for the year?

Ch. 5

1. Price

-

Weighted Divisor (LO4, CFA2)

Able, Baker, and Charlie are the only t

hree stocks in

an index. The stocks sell for $93, $312, and $78, respectively. If Baker undergoes a 2

-

for

-

1 stock

split, what is the new divisor for the price

-

weighted index?

4. Price

-

Weighted Index (LO4, CFA2)

You are given the following information concerning

two

stocks that make up an index. What is the price

-

weighted return for the in

dex?

Price

p

er Shar

e

Shares

Outstanding

B

eginning

o

f

Year

E

nd

of

Year

Kirk, Inc.

35,000

$37

$42

Picard Co.

26,000

8

4

91

10. DJIA (LO4, CFA2)

On May 9, 2012, the DJIA opened at 12,921.81. The divisor at that time

was .132129493. Suppose on this day

the prices for 29 of the stocks remained unchanged and

one stock increased $5.00. What would the DJIA level be at the end of the day?

Ch. 4 & 5 Problem Questions

Ch. 4

8. Turnover (LO2, CFA3) A mutual fund sold $36 million of assets during the year and

purchased $32 million in assets. If the average daily assets of the fund were $96 million, what

was the fund turnover?

9. Closed-End Funds (LO2, CFA2) A closed-end fund has total assets of $240 million and

liabilities of $110,000. Currently, 11 million shares are outstanding. What is the NAV of the

fund? If the shares currently sell for $19.25, what is the premium or discount on the fund?

10. Mutual Fund Returns (LO2, CFA1) You invested $10,000 in a mutual fund at the

beginning of the year when the NAV was $32.24. At the end of the year the fund paid $.24 in

short-term distributions and $.41 in long-term distributions. If the NAV of the fund at the end of

the year was $35.23, what was your return for the year?

Ch. 5

1. Price-Weighted Divisor (LO4, CFA2) Able, Baker, and Charlie are the only three stocks in

an index. The stocks sell for $93, $312, and $78, respectively. If Baker undergoes a 2-for-1 stock

split, what is the new divisor for the price-weighted index?

4. Price-Weighted Index (LO4, CFA2) You are given the following information concerning

two stocks that make up an index. What is the price-weighted return for the index?

Price per Share

Shares

Outstanding

Beginning

of Year

End of

Year

Kirk, Inc.

35,000 $37 $42

Picard Co. 26,000 84 91

10. DJIA (LO4, CFA2) On May 9, 2012, the DJIA opened at 12,921.81. The divisor at that time

was .132129493. Suppose on this day the prices for 29 of the stocks remained unchanged and

one stock increased $5.00. What would the DJIA level be at the end of the day?