FIN 301 Quiz: FIN301 Quiz 4 2015 Spring

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turquoisegnu128

28 Sep 2018

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Hedge funds generally have a 2-20 fee structure. Hedge funds are good investments for the average investor. Hedge fund fees are much lower than mutual fund fees. Group 2 interest? interest, interest is earned on interest. interest. interest, interest is earned on both the original investment and the accumulated interest. not reinvested. Hedge funds use advanced investment strategies and benefit from lax regulation. With simple interest, interest is earned only on the original investment whereas with compound. With compound interest, the assumption is that interest earned on the original investment is. Simple interest and compound interest always lead to the same ending investment value so. Which of the following is true concerning the difference between simple and compound. Simple interest always leads to a higher ending investment value when compared to compound. An investor will receive a 20-year annuity of ,000 per year. With compound interest, interest is earned only on the original investment whereas with simple.

Related Questions

Which of these hedge fund strategies would we expect to have the highest fee level on average?

a) 130/30 equity only; b) Convertible bond arbitrage; c) Event driven; d) Fund-of-funds

You are an investor with Cowher Fund Management, a hedge fund specializing in a market neutral statistical abritrage strategy. The fund had several down years, but this most recent year's returns have been spectacular. The contract you signed had a high water mark provision where you do not have to pay the performance fee on any returns less than the previous high asset value. You pay a 1% management fee, a 25% performance fee. At the start of the year your investment assets were valued at $75,000,000. Your High Water Mark is $97,000,000. The fund earned a reported 39% return. What is the amount of the total fee paid in dollars?

a) $1,563,750; b) $2,562,500; c) $2,937,500; d) $3,376,250

beigehound924

Question 11

Advantages of mutual funds include

	A.	professional management.
	B.	all of these.
	C.	liquidity.
	D.	diversification.

Question 12

Which of the following types of investment companies operates much like an index fund?

	A.	exchange-traded fund
	B.	unit investment trust
	C.	closed-end fund
	D.	REIT

Question 13

A common stock fund that invests in only one industry is called a(n) ____ fund.

	A.	maximum capital gains
	B.	growth and income
	C.	index
	D.	sector

Question 14

Mutual funds that charge a load do so to compensate

	A.	fund managers.
	B.	brokers.
	C.	shareholders.
	D.	the SEC.

Question 15

Your first task in selecting a mutual fund is to

	A.	review your investment policy.
	B.	locate sources of comparative performance data.
	C.	eliminate funds inappropriate for your investment goals.
	D.	screen and compare funds that meet your investment criteria.

Question 16

Taxes on annual earnings from mutual funds can be avoided

	A.	while those amounts are kept in an IRS-qualified retirement account.
	B.	as long as the mutual shares are not sold.
	C.	while those amounts are kept in an IRS-qualified retirement account and if those earnings are interest from municipal bonds.
	D.	if those earnings are interest from municipal bonds.

Question 17

Mutual funds permit automatic income reinvestment of

	A.	ordinary income dividend distribution.
	B.	none of these.
	C.	both ordinary income dividend distributions and capital gains distributions.
	D.	capital gains distribution.

Question 18

The type of mutual fund that is not actively managed is called a(n) ____ fund.

	A.	emerging market
	B.	money market
	C.	index
	D.	sector

Question 19

A mutual fund that does not assess a sales charge at the time of the investment purchase is called a ____ fund.

	A.	back-end load
	B.	front-end load
	C.	low-load
	D.	no-load

Question 20

Open-end mutual funds

	A.	make up about 75 percent of all mutual funds.
	B.	are sold only through brokers.
	C.	are sold at their current net asset value.
	D.	are sold to other investors on a secondary market.

apricotsnail400

Suppose an individual invests $20,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 3.0 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 1.0 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 15 percent each year paid on the last day of the year. If the investor reinvests the annual returns paid on the investment, calculate the annual return on the mutual funds over the two-year investment period.

A. The individuals actual investment, after the load fee is deducted:

B. Annual operating expenses:

C. Value of investment at end of year 1:

D. The investors return on the mutual fund investment after 1 year:

E. Value of investment at end of year 2:

F. Thus the investors annual return on the mutual fund over a 2 year period:

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FIN 301 Quiz: FIN301 Quiz 4 2015 Spring

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