IP Exam II
10. Investors in closed-end funds who wish to liquidate their positions must A. sell their shares through a broker. B. sell their shares to the issuer at a discount to net asset value. C. sell their shares to the issuer at a premium to net asset value. D. sell their shares to the issuer for net asset value. E. hold their shares to maturity.
A
13. Ceteris paribus, a decrease in the demand for loans A. drives the interest rate down. B. drives the interest rate up. C. might not have any effect on interest rates. D. results from an increase in business prospects and a decrease in the level of savings.
A
15. Historical records regarding return on stocks, Treasury bonds, and Treasury bills between 1926 and 2015 show That A. stocks offered investors greater rates of return than bonds and bills. B. stock returns were less volatile than those of bonds and bills. C. bonds offered investors greater rates of return than stocks and bills. D. bills outperformed stocks and bonds. E. Treasury bills always offered a rate of return greater than inflation.
A
17. In 2016, the proportion of mutual funds (based on total assets) specializing in bonds was A. 21.8%. B. 28.0%. C. 54.1%. D. 73.4%. E. 63.5%.
A
19. You have been given this probability distribution for the holding-period return for KMP stock: What is the expected variance for KMP stock? A. 66.04% B. 69.96% C. 77.04% D. 63.72% E. 78.45%
A
22. If a portfolio had a return of 18%, the risk-free asset return was 5%, and the standard deviation of the portfolio's excess returns was 34%, the risk premium would be A. 13%. B. 18%. C. 49%. D. 12%. E. 29%.
A
23. Investors' Choice Fund had NAV per share of $37.25 on January 1, 2016. On December 31 of the same year, the fund s rate of return for the year was 17.3%. Income distributions were $1.14, and the fund had capital gain distributions of $1.35. Without considering taxes and transactions costs, what ending NAV would you calculate for Investors' Choice? A. $41.20 B. $33.88 C. $43.69 D. $42.03 E. $46.62
A
27. As of 2016, which class of mutual funds had the largest amount of assets invested? A. Equity funds B. Bond funds C. Mixed asset classes, such as asset allocation funds D. Money market funds E. Global funds
A
27. In words, the real rate of interest is approximately equal to A. the nominal rate minus the inflation rate. B. the inflation rate minus the nominal rate. C. the nominal rate times the inflation rate. D. the inflation rate divided by the nominal rate. E. the nominal rate plus the inflation rate.
A
3. A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 9%. What is your approximate annual real rate of return if the rate of inflation was 4% over the year? A. 5% B. 10% C. 7% D. 3%
A
32. An investor purchased a bond 45 days ago for $985. He received $15 in interest and sold the bond for $980. What is the holding-period return on his investment? A. 1.02% B. 0.50% C. 1.92% D. 0.01%
A
32. Assume that you purchased 200 shares of Super Performing mutual fund at a net asset value of $21 per share. During the year, you received dividend income distributions of $1.50 per share and capital gains distributions of $2.85 per share. At the end of the year, the shares had a net asset value of $23 per share. What was your rate of return on this investment? A. 30.24% B. 25.37% C. 27.19% D. 22.44% E. 29.18%
A
39. A mutual fund had year-end assets of $750,000,000 and liabilities of $7,500,000. There were 40,000,000 shares in the fund at year end. What was the mutual fund's net asset value? A. $9.63 B. $18.56 C. $16.42 D. $17.87 E. $17.26
A
4. A year ago, you invested $10,000 in a savings account that pays an annual interest rate of 5%. What is your approximate annual real rate of return if the rate of inflation was 3.5% over the year? A. 1.5% B. 10% C. 7% D. 3% E. None of the options are correct.
A
4. 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. $18.11 B. $18.81 C. $69.96 D. $7.00 E. $181.07
A
41. 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? A. 17,534,456 B. 16,488,372 C. 18,601,742 D. 17,542,515
A
43. A mutual fund had year-end assets of $437,000,000 and liabilities of $37,000,000. If the fund NAV was $60.12, how many shares must have been held in the fund? A. 6,653,360 B. 8,412,642 C. 10,165,476 D. 9,165,414 E. 9,219,160
A
46. A mutual fund had NAV per share of $26.25 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 16.4%. Income distributions were $1.27, and the fund had capital gain distributions of $1.85. Without considering taxes and transactions costs, what ending NAV would you calculate? A. $27.44 B. $33.88 C. $24.69 D. $42.03 E. $16.62
A
48. A mutual fund had NAV per share of $36.15 on January 1, 2016. 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? A. $37.93 B. $34.52 C. $44.69 D. $47.25 E. $36.28
A
52. Of the following types of mutual funds, an investor who wishes to invest in a diversified portfolio of foreign stocks (excluding the U.S.) should choose A. international funds. B. global funds. C. regional funds. D. emerging-market funds.
A
53. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the S&P 500 should choose A. SPY. B. DIA. C. QQQ. D. IWM. E. VTI.
A
62. A mutual fund had average daily assets of $4.0 billion in 2016. The fund sold $1.5 billion worth of stock and purchased $1.6 billion worth of stock during the year. The fund's turnover ratio is A. 37.5%. B. 22%. C. 15%. D. 45%. E. 20%.
A
67. You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 6.0%. If the securities in which the fund invested increased in value by 10% during the year, and the fund's expense ratio was 1.5%, your return if you sold the fund at the end of the year would be A. 1.99%. B. 2.32%. C. 1.65%. D. 2.06%. E. None of the options are correct.
A
Topic: Nominal and real rates 17. You have been given this probability distribution for the holding-period return for KMP stock: What is the expected holding-period return for KMP stock? A. 10.40% B. 9.32% C. 11.63% D. 11.54% E. 10.88%
A
10. Which of the following statement(s) is(are) true? I) The real rate of interest is determined by the supply and demand for funds. II) The real rate of interest is determined by the expected rate of inflation. III) The real rate of interest can be affected by actions of the Fed. IV) The real rate of interest is equal to the nominal interest rate plus the expected rate of inflation. A. I and II only B. I and III only C. III and IV only D. II and III only E. I, II, III, and IV only
B
12. At issue, offering prices of open-end funds will often be A. less than NAV due to loads. B. greater than NAV due to loads. C. less than NAV due to limited demand. D. greater than NAV due to excess demand. E. less than or greater than NAV with no apparent pattern.
B
12. Other things equal, an increase in the government budget deficit A. drives the interest rate down. B. drives the interest rate up. C. might not have any effect on interest rates. D. increases business prospects.
B
14. The holding-period return (HPR) on a share of stock is equal to A. the capital gain yield during the period plus the inflation rate. B. the capital gain yield during the period plus the dividend yield. C. the current yield plus the dividend yield. D. the dividend yield plus the risk premium. E. the change in stock price.
B
18. You have been given this probability distribution for the holding-period return for KMP stock: What is the expected standard deviation for KMP stock? A. 6.91% B. 8.13% C. 7.79% D. 7.25% E. 8.85%
B
28. If the Federal Reserve lowers the Fed Funds rate, ceteris paribus, the equilibrium levels of funds lent will __________, and the equilibrium level of real interest rates will ___________. A. increase, increase B. increase, decrease C. decrease, increase D. decrease, decrease E. reverse direction from their previous trends
B
31. Patty O Furniture purchased 100 shares of Green Isle mutual fund at a net asset value of $42 per share. During the year, Patty received dividend income distributions of $2.00 per share and capital gains distributions of $4.30 per share. At the end of the year, the shares had a net asset value of $40 per share. What was Patty's rate of return on this investment? A. 5.43% B. 10.24% C. 7.19% D. 12.44% E. 9.18%
B
33. An investor purchased a bond 63 days ago for $980. He received $17 in interest and sold the bond for $987. What is the holding-period return on his investment? A. 1.52% B. 2.45% C. 1.92% D. 2.68%
B
33. Assume that you purchased shares of High Flying mutual fund at a net asset value of $12.50 per share. During the year, you received dividend income distributions of $0.78 per share and capital gains distributions of $1.67 per share. At the end of the year, the shares had a net asset value of $13.87 per share. What was your rate of return on this investment? A. 29.43% B. 30.56% C. 31.19% D. 32.44% E. 29.18%
B
36. A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value? A. $22.87 B. $22.39 C. $22.24 D. $17.61 E. $19.25
B
5. If the annual real rate of interest is 5%, and the expected inflation rate is 4%, the nominal rate of interest would be approximately A. 1%. B. 9%. C. 20%. D. 15%.
B
51. Of the following types of mutual funds, an investor who wishes to invest in a diversified portfolio of stocks worldwide (including the U.S.) should choose A. international funds. B. global funds. C. regional funds. D. emerging-market funds.
B
54. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Dow Jones Industrials should choose A. SPY. B. DIA. C. QQQQ. D. IWM. E. VTI.
B
58. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the MSCI Japan Index should choose A. SPY. B. EWJ. C. QQQQ. D. IWM. E. VTI.
B
6. If the annual real rate of interest is 2.5%, and the expected inflation rate is 3.7%, the nominal rate of interest would be approximately A. 3.7%. B. 6.2%. C. 2.5%. D. -1.2%.
B
64. You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 5.75%. If the securities in which the fund invested increased in value by 11% during the year, and the fund's expense ratio was 1.25%, your return if you sold the fund at the end of the year would be A. 4.33%. B. 3.44%. C. 2.45%. D. 6.87%.
B
66. You purchased shares of a mutual fund at a price of $17 per share at the beginning of the year and paid a front-end load of 5.0%. If the securities in which the fund invested increased in value by 12% during the year, and the fund's expense ratio was 1.0%, your return if you sold the fund at the end of the year would be A. 4.75%. B. 5.45%. C. 5.65%. D. 4.39%.
B
7. You purchased a share of stock for $20. One year later, you received $1 as a dividend and sold the share for $29. What was your holding-period return? A. 45% B. 50% C. 5% D. 40% E. None of the options are correct.
B
8. You purchased a share of stock for $68. One year later, you received $3.00 as a dividend and sold the share for $74.50. What was your holding-period return? A. 12.5% B. 14.0% C. 13.6% D. 11.8%
B
1. Which one of the following statements regarding open-end mutual funds is false? A. The funds redeem shares at net asset value. B. The funds offer investors professional management. C. The funds offer investors a guaranteed rate of return. D. The funds redeem shares at net asset value and offer investors professional management.
C
16. In 2016, the proportion of mutual funds (based on total assets) specializing in common stocks was A. 21.7%. B. 28.0%. C. 52.1%. D. 73.4%. E. 63.5%.
C
2. Over the past year, you earned a nominal rate of interest of 8% on your money. The inflation rate was 4% over the same period. The exact actual growth rate of your purchasing power was A. 15.5%. B. 10.0%. C. 3.8%. D. 4.8%. E. 15.0%.
C
24. Which of the following is not an advantage of owning mutual funds? A. They offer a variety of investment styles. B. They offer small investors the benefits of diversification. C. They treat income as "passed through" to the investor for tax purposes. D. All of the options are advantages of mutual funds. E. None of the options are an advantage of mutual funds.
C
25. Which of the following factors would not be expected to affect the nominal interest rate? A. The supply of loans B. The demand for loans C. The coupon rate on previously issued government bonds D. The expected rate of inflation E. Government spending and borrowing
C
26. Which of the following characteristics apply to unit investment trusts? I) Most are invested in fixed-income portfolios. II) They are actively-managed portfolios. III) The sponsor pools securities, then sells public shares in the trust. IV) The portfolio is fixed for the life of the fund. A. I and IV B. I and II C. I, III, and IV D. I, II, and III E. I, II, III, and IV
C
34. 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? A. 2.91% B. 3.07% C. 1.10% D. 1.78% E. -1.18%
C
45. A mutual fund had NAV per share of $23.00 on January 1, 2016. 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. 11.26% B. 10.54% C. 8.87% D. 8.26% E. 9.63%
C
49. A mutual fund had NAV per share of $37.12 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 11.0%. Income distributions were $2.26, and the fund had capital gain distributions of $1.64. Without considering taxes and transactions costs, what ending NAV would you calculate? A. $37.93 B. $34.52 C. $37.30 D. $47.25 E. $36.28
C
55. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Nasdaq 100 should choose A. SPY. B. DIA. C. QQQ. D. IWM. E. VTI.
C
59. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the MSCI France Index should choose A. SPY. B. EWJ. C. EWQ. D. IWM. E. VTI.
C
6. Diversified Portfolios had year-end assets of $279,000,000 and liabilities of $43,000,000. If Diversified's NAV was $42.13, how many shares must have been held in the fund? A. 43,000,000 B. 6,488,372 C. 5,601,709 D. 1,182,203
C
7. 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? A. 21,619,346.92 B. 22,930,546.28 C. 24,860,161.59 D. 25,693,645.25
C
9. Pools of money invested in a portfolio that is fixed for the life of the fund are called A. closed-end funds. B. open-end funds. C. unit investment trusts. D. REITS. E. redeemable trust certificates.
C
11. Closed-end funds are frequently issued at a ______ to NAV and subsequently trade at a __________ to NAV. A. discount, discount B. discount, premium C. premium, premium D. premium, discount
D
11. Which of the following statement(s) is(are) true? A. Inflation has no effect on the nominal rate of interest. B. The realized nominal rate of interest is always greater than the real rate of interest. C. Certificates of deposit offer a guaranteed real rate of interest. D. None of the options are true.
D
13. Which of the following statements about real estate investment trusts is true? A. REITs invest in real estate or loans secured by real estate. B. REITs raise capital by borrowing from banks and issuing mortgages. C. REITs are similar to open-end funds, with shares redeemable at NAV. D. REITs invest in real estate or loans secured by real estate and raise capital by borrowing from banks and issuing mortgages. E. All of the options are true.
D
15. Which of the following statements about money market mutual funds is true? A. They invest in commercial paper, CDs, and repurchase agreements. B. They usually offer check-writing privileges. C. They are highly leveraged and risky. D. They invest in commercial paper, CDs, and repurchase agreements, and they usually offer check-writing privileges. E. All of the options are true.
D
16. If the interest rate paid by borrowers and the interest rate received by savers accurately reflect the realized rate of inflation, A. borrowers gain and savers lose. B. savers gain and borrowers lose. C. both borrowers and savers lose. D. neither borrowers nor savers gain nor lose. E. both borrowers and savers gain.
D
19. In 2016, the proportion of hybrid (bond and stock) mutual funds (based on total assets) was A. 21.7%. B. 28.0%. C. 54.1%. D. 8.5%. E. 22.6%.
D
2. Which one of the following statements regarding closed-end mutual funds is false? A. The funds always trade at a discount from NAV. B. The funds redeem shares at their net asset value. C. The funds offer investors professional management. D. The funds always trade at a discount from NAV and redeem shares at their net asset value. E. None of the options are correct.
D
21. The Profitability Fund had NAV per share of $17.50 on January 1, 2016. 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. 11.26% B. 15.54% C. 16.97% D. 21.26% E. 9.83%
D
21. The risk premium for common stocks A. cannot be zero, for investors would be unwilling to invest in common stocks. B. must always be positive, in theory. C. is negative, as common stocks are risky. D. cannot be zero, for investors would be unwilling to invest in common stocks and must always be positive, in theory. E. cannot be zero, for investors would be unwilling to invest in common stocks and is negative, as common stocks are risky.
D
23. You purchase a share of Boeing stock for $90. One year later, after receiving a dividend of $3, you sell the stock for $92. What was your holding-period return? A. 4.44% B. 2.22% C. 3.33% D. 5.56% E. None of the options are correct.
D
24. Toyota stock has the following probability distribution of expected prices one year from now: If you buy Toyota today for $55 and it will pay a dividend during the year of $4 per share, what is your expected holding-period return on Toyota? A. 17.72% B. 18.89% C. 17.91% D. 18.18%
D
25. Which of the following would increase the net asset value of a mutual fund share, assuming all other things remain unchanged? A. An increase in the number of fund shares outstanding B. An increase in the fund's accounts payable C. A change in the fund's management D. An increase in the value of one of the fund's stocks
D
29. "Bracket Creep" happens when A. tax liabilities are based on real income and there is a negative inflation rate. B. tax liabilities are based on real income and there is a positive inflation rate. C. tax liabilities are based on nominal income and there is a negative inflation rate. D. tax liabilities are based on nominal income and there is a positive inflation rate. E. too many peculiar people make their way into the highest tax bracket.
D
30. The fee that mutual funds use to help pay for advertising and promotional literature is called a A. front-end load fee. B. back-end load fee. C. operating expense fee. D. 12b-1 fee. E. structured fee.
D
31. You have been given this probability distribution for the holding-period return for Cheese, Inc. stock: Assuming that the expected return on Cheese's stock is 14.35%, what is the standard deviation of these returns? A. 4.72% B. 6.30% C. 4.38% D. 5.74% E. None of the options are correct.
D
35. Assume that you purchased shares of a mutual fund at a net asset value of $10.00 per share. During the year, you received dividend income distributions of $0.05 per share and capital gains distributions of $0.06 per share. At the end of the year, the shares had a net asset value of $8.16 per share. What was your rate of return on this investment? A. -18.24% B. -16.1% C. 16.10% D. -17.3% E. 17.3%
D
37. 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? A. $92.53 B. $67.39 C. $63.24 D. $65.60 E. $17.46
D
40. A mutual fund had year-end assets of $465,000,000 and liabilities of $37,000,000. If the fund NAV was $56.12, how many shares must have been held in the fund? A. 4,300,000 B. 6,488,372 C. 8,601,709 D. 7,626,515 E. None of these options are correct.
D
5. Growth Fund had year-end assets of $862,000,000 and liabilities of $12,000,000. There were 32,675,254 shares in the fund at year end. What was Growth Fund's net asset value? A. $28.17 B. $25.24 C. $19.62 D. $26.01 E. $21.56
D
56. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Russell 2000 should choose A. SPY. B. DIA. C. QQQQ. D. IWM. E. VTI.
D
61. A mutual fund had average daily assets of $2.0 billion in 2016. The fund sold $500 million worth of stock and purchased $600 million worth of stock during the year. The fund's turnover ratio is A. 27.5%. B. 12%. C. 15%. D. 25%. E. 20%.
D
63. A mutual fund had average daily assets of $4.7 billion in 2016. The fund sold $2.2 billion worth of stock and purchased $3.6 billion worth of stock during the year. The fund's turnover ratio is A. 37.5%. B. 22.6%. C. 15.3%. D. 46.8%. E. 20.7%.
D
65. You purchased shares of a mutual fund at a price of $12 per share at the beginning of the year and paid a front-end load of 4.75%. If the securities in which the fund invested increased in value by 9% during the year, and the fund's expense ratio was 1.5%, your return if you sold the fund at the end of the year would be A. 4.75%. B. 3.54%. C. 2.65%. D. 2.39%.
D
8. Most actively-managed mutual funds, when compared to a market index such as the Wilshire 5000, A. beat the market return in all years. B. beat the market return in most years. C. exceed the return on index funds. D. do not outperform the market.
D
9. Which of the following determine(s) the level of real interest rates? I) The supply of savings by households and business firms II) The demand for investment funds III) The government's net supply and/or demand for funds A. I only B. II only C. I and II only D. I, II, and III
D
ver the past year, you earned a nominal rate of interest of 10% on your money. The inflation rate was 5% over the same period. The exact actual growth rate of your purchasing power was A. 15.5%. B. 10.0%. C. 5.0%. D. 4.8%. E. 15.0%.
D
14. Which of the following statements about real estate investment trusts is true? A. REITs may be equity trusts or mortgage trusts. B. REITs are usually highly leveraged. C. REITs are similar to closed-end funds. D. REITs may be equity trusts or mortgage trusts and are usually highly leveraged. E. All of the options are true.
E
18. In 2016, the proportion of mutual funds (based on total assets) specializing in money market securities was A. 21.7%. B. 28.0%. C. 54.1%. D. 73.4%. E. 17.6%.
E
20. If the nominal return is constant, the after-tax real rate of return A. declines as the inflation rate increases. B. increases as the inflation rate increases. C. declines as the inflation rate declines. D. increases as the inflation rate decreases. E. declines as the inflation rate increases and increases as the inflation rate decreases.
E
20. Management fees and other expenses of mutual funds may include A. front-end loads. B. back-end loads. C. 12b-1 charges. D. front-end and back-end loads. E. front-end loads, back-end loads, and 12b-1 charges.
E
22. The Yachtsman Fund had NAV per share of $36.12 on January 1, 2016. On December 31 of the same year, the fund's NAV was $39.71. Income distributions were $0.64, and the fund had capital gain distributions of $1.13. Without considering taxes and transactions costs, what rate of return did an investor receive on the Yachtsman Fund last year? A. 22.92% B. 17.68% C. 14.39% D. 18.52% E. 14.84%
E
26. If a portfolio had a return of 11%, the risk-free asset return was 6%, and the standard deviation of the portfolio's excess returns was 25%, the risk premium would be A. 14%. B. 6%. C. 35%. D. 21%. E. 5%.
E
28. Commingled funds are A. amounts invested in equity and fixed-income mutual funds. B. funds that may be purchased at intervals of 3, 6, or 12 months at the discretion of management. C. amounts invested in domestic and global equities. D. closed-end funds that may be repurchased only once every two years at the discretion of mutual fund management. E. partnerships of investors that pool their funds, which are then managed for a fee.
E
29. Which of the following is true regarding equity mutual funds? I) They invest primarily in stock. II) They may hold fixed-income securities, as well as stock. III) Most hold money market securities, as well as stock. IV) Two types of equity funds are income funds and growth funds. A. I and IV B. I, III, and IV C. I, II, and IV D. I, II, and III E. I, II, III, and IV
E
3. Which of the following functions do investment companies perform for their investors? A. Record keeping and administration B. Diversification and divisibility C. Professional management D. Lower transaction costs E. All of the options.
E
30. The holding-period return (HPR) for a stock is equal to A. the real yield minus the inflation rate. B. the nominal yield minus the real yield. C. the capital gains yield minus the tax rate. D. the capital gains yield minus the dividend yield. E. the dividend yield plus the capital gains yield.
E
38. 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. $9.63 B. $57.71 C. $16.42 D. $17.87 E. $17.26
E
42. A mutual fund had year-end assets of $327,000,000 and liabilities of $46,000,000. If the fund NAV was $30.48, how many shares must have been held in the fund? A. 11,354,751 B. 8,412,642 C. 10,165,476 D. 9,165,414 E. 9,219,160
E
44. A mutual fund had NAV per share of $19.00 on January 1, 2016. On December 31 of the same year, the fund's NAV was $19.14. Income distributions were $0.57, and the fund had capital gain distributions of $1.12. Without considering taxes and transactions costs, what rate of return did an investor receive on the fund last year? A. 11.26% B. 10.54% C. 7.97% D. 8.26% E. 9.63%
E
47. A mutual fund had NAV per share of $16.75 on January 1, 2016. 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? A. $17.44 B. $13.28 C. $14.96 D. $17.25 E. $16.62
E
50. Differences between hedge funds and mutual funds are that A. hedge funds are only subject to minimal SEC regulation. B. hedge funds are typically open only to wealthy or institutional investors. C. hedge fund managers can pursue strategies not available to mutual funds, such as short selling, heavy use of derivatives, and leverage. D. hedge funds are commonly structured as private partnerships. E. All of the options.
E
57. Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Wilshire 5000 should choose A. SPY. B. DIA. C. QQQ. D. IWM. E. VTI.
E
60. A mutual fund had average daily assets of $3.0 billion in 2016. The fund sold $600 million worth of stock and purchased $700 million worth of stock during the year. The fund's turnover ratio is A. 27.5%. B. 12%. C. 15%. D. 25%. E. 20%.
E