# Investments, Chapter 4

Save this PDF as:

Size: px
Start display at page:

## Transcription

1 Investments, Chapter 4 Answers to Selected Problems 2. An open-end fund has a net asset value of \$10.70 per share. It is sold with a front-end load of 6 percent. What is the offering price? Answer: When a dollar is invested in this fund, \$0.94 is used to purchase assets. That is, 94 percent of offering price is worth one share. If NAV is the value of one share, 0.94 offering price NAV offering price \$ If the offering price of an open-end fund is \$12.30 per share and the fund is sold with a front-end load of 5 percent, what is its net asset value? Answer: If 95% of the offering price is used to buy one share at net asset value, this means that 0.95 offering price NAV NAV \$ The composition of the Fingroup Fund portfolio is as in Table 1. The has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals \$30,000. There are 4 million shares outstanding. What is the net asset value of the fund? Answer: Total asset value is 200, , , , \$42, 000, 000. Hence net asset value is given by NAV 42, 000, , 000 4, 000, 000 \$

2 Stock Shares Price(\$) A 200, B 300, C 400, D 600, Table 1: Fingroup Fund portfolio. 5. Reconsider the Fingroup Fund in the previous problem. If during the year the portfolio manager sells all of the holdings of stock D and replaced it with 200,000 shares of stock E at \$50 per share and 200,000 shares of stock F at \$25 per share, what is the portfolio turnover rate? Answer: The value of assets sold and replaced is \$15,000,000. The turnover rate is 15, 000, , 000, %. 6. 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? Answer: NAV \$ b. If the fund sells for \$36 per share, what is the percentage premium or discount that will appear in the listings in the financial pages? Answer: \$36 (1- discount) \$39.40, which implies a discount of 8.6%. 7. Corporate Fund started the year with a net asset value of \$ By year-end, its NAV equalled \$ The fund paid year-end distributions of income and capital gains of \$1.50. What was the rate of return to an investor in the fund? Answer: Rate of return is calculated as NAV end NAV start + distributions NAV start %. 2

3 8. A closed-end fund starts the year with a net asset value of \$12. By year-end, NAV equals \$ At the beginning of the year, the fund was selling at a 2 percent premium to NAV. By the end of the year, the fund is selling at a 7 percent discount to NAV. The fund paid year-end distributions of income and capital gains of \$1.50. a. What is the rate of return to an investor in the fund during the year? Answer: Let NAV 0 and NAV 1 denote the fund s net asset value at the beginning of the year and at the end of the year, respectively. The return on the fund is (1 0.07)NAV 1 ( )NAV ( )NAV %. b. What would have been the rate of return to an investor who held the same securities as the fund manager during the year? Answer: An investor holding the securities directly would have avoided the premium at the beginning of the year and the discount at the end of the year. The return should be higher here since there was a premium at the time of the purchase and a discount at the time of the sale. The return from holding the securities directly would have been NAV 1 NAV NAV %. 13. Consider a mutual fund with \$200 million in assets at the start of the year and with 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of \$2 million. The stocks included in the fund s portfolio increase in price by 8 percent, but no securities are sold, and there are no capital gains distributions. The fund charges other fees of 1 percent, which are deducted from portfolio assets at year-end. What is net asset value at the start and end of the year? What is the rate of return for an investor in the fund? Answer: Net asset value at the start of the year is 200/10 \$20. Net asset value at the end of the year is (1.08) 200/10 \$21.6. Dividend per share is 2/10 \$0.20 and 3

5 c. Now suppose that instead of a front-end load the fund assesses an other charge of.75 percent per year. What annual rate of return must the fund portfolio earn for you to be better off in the fund than in the GIC? Does your answer in this case depend on the time horizon? Answer: Without front-end load, all we are comparing are yearly returns and thus the horizon span does not matter anymore. For the fund to do better than the GIC, we need 1 + r > 1.06 r > 7.25%. 5

### Investment Analysis (FIN 670) Fall 2009. Homework 2

Investment Analysis (FIN 670) Fall 2009 Homework 2 Instructions: please read carefully You should show your work how to get the answer for each calculation question to get full credit The due date is Tue,

### Mutual Funds and Other Investment Companies. Chapter 4

Mutual Funds and Other Investment Companies Chapter 4 Investment Companies financial intermediaries that collect funds from individual investors and invest in a portfolio of assets shares = claims to portfolio

Review for Exam 1 Instructions: Please read carefully The exam will have 21 multiple choice questions and 5 work problems. Questions in the multiple choice section will be either concept or calculation

### Mutual Funds and Other Investment Companies

Mutual Funds and Other Investment Companies Investment Companies Pool funds of individual investors and invest in a wide range of securities or other assets. pooling of assets Provide several functions

### Closed-End Funds. A closed-end fund is a type of investment company. whose shares are listed on a stock exchange

a guide to Closed-End Funds A closed-end fund is a type of investment company whose shares are listed on a stock exchange or are traded in the over-the-counter market. Contents What Is a Closed-End Fund?...2

### Net Asset Value (NAV) Classification of Mutual Funds. Load Funds and No-Load Funds. Classification of Mutual Funds

CHAPTER 16 Why Investors Purchase Mutual Funds Investing in Mutual Funds Personal Finance 7e Kapoor Dlabay Hughes Professional management. Who is the fund s manager? Managers can change. Diversification.

### Solutions for End-of-Chapter Questions and Problems: Chapter Five

Solutions for End-of-Chapter Questions and Problems: Chapter Five 2. What are money market mutual funds? In what assets do these funds typically invest? What factors have caused the strong growth in this

### UNDERSTANDING CLOSED-END FUNDS

Lessons in Investing for Income UNDERSTANDING CLOSED-END FUNDS Income is one of investors most common goals but one not easily achieved, especially in today s low-yielding environment. That s why investors

### Bodie, Kane, Marcus, Perrakis and Ryan, Chapter 2

Bodie, Kane, Marcus, Perrakis and Ryan, Chapter 2 Answers to Selected Problems 1. The following multiple-choice problems are based on questions that have appeared in past CFA examinations. a A firm s preferred

### FCS5510 Sample Homework Problems and Answer Key Unit03 CHAPTER 6. INVESTMENT COMPANIES: MUTUAL FUNDS

FCS5510 Sample Homework Problems and Answer Key Unit03 CHAPTER 6. INVESTMENT COMPANIES: MUTUAL FUNDS PROBLEMS 1. What is the net asset value of an investment company with \$10,000,000 in assets, \$500,000

### The Young Investor s Guide To Understanding The Terms Used In Investing.

The Young Investor s Guide To Understanding The Terms Used In Investing. The Young Investor Dictionary compliments of Integrity Mutual Funds. YOUNG INVESTOR DICTIONARY Asset Something of value. The property

### Chapter 2 Characteristics of Investment Companies

Chapter 2 Characteristics of Investment Companies Abstract Chapter 2 provides a brief overview of five types of investment companies: open-end funds, closed-end funds, unit investment trusts, exchange-traded

### Bodie, Kane, Marcus, Perrakis and Ryan, Chapter 3

Bodie, Kane, Marcus, Perrakis and Ryan, Chapter 3 Answers to Selected Problems 1 FBN Inc has just sold 100,000 shares in an initial public offering The underwriter s explicit fees were \$70,000 The offering

### Mid-Term Spring 2003

Mid-Term Spring 2003 1. (1 point) You want to purchase XYZ stock at \$60 from your broker using as little of your own money as possible. If initial margin is 50% and you have \$3000 to invest, how many shares

### 8000 100 = Rs 800 Face value of 500 shares = Rs (500 20) = Rs 10000 800 Rate of dividend = = 8%. Math Class X 2 Question Bank

Question Bank Shares And Dividend 1. Find the dividend due at the end of a year on 250 shares of Rs 50 each, if the half yearly dividend is 4% of the value of the share. Half-yearly dividend on 1 share

### For both risk and return, increasing order is b, c, a, d. On average, the higher the risk of an investment, the higher is its expected return. 2.

For both risk and return, increasing order is b, c, a, d. On average, higher risk of an investment, higher is its expected return. 2. Since price didn t change, capital gains yield was zero. If total return

### Mutual Funds and Other Investment Companies Hedge Funds

Mutual Funds and Other Investment Companies Hedge Funds Chapter 4 & 26 McGraw-Hill/Irwin Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved. Lecture outline Introduction of investment

### Chapter Review Problems

Chapter Review Problems State all stock and bond prices in dollars and cents. Unit 14.1 Stocks 1. When a corporation earns a profit, the board of directors is obligated by law to immediately distribute

### Will Exchange-Traded Funds Replace Conventional Mutual Funds? Presentation by Gary L. Gastineau

Will Exchange-Traded Funds Replace Conventional Mutual Funds? Presentation by Gary L. Gastineau The Merrill Lynch Center for the Study of International Financial Services and Markets Hofstra University

### CHAPTER 5. Interest Rates. Chapter Synopsis

CHAPTER 5 Interest Rates Chapter Synopsis 5.1 Interest Rate Quotes and Adjustments Interest rates can compound more than once per year, such as monthly or semiannually. An annual percentage rate (APR)

### Understanding Mutual Funds

Understanding Mutual Funds 1) Mutual Fund Definition A mutual fund is a company that pools investors' money and invests on behalf of the investors. You can think of a mutual fund as a company that raises

Review for Exam 1 Instructions: Please read carefully The exam will have 25 multiple choice questions and 5 work problems covering chapter 1, 2, 3, 4, 14, 16. Questions in the multiple choice section will

TMX TRADING SIMULATOR QUICK GUIDE Reshaping Canada s Equities Trading Landscape OCTOBER 2014 Markets Hours All market data in the simulator is delayed by 15 minutes (except in special situations as the

### Stock Market -Trading and market participants

Stock Market -Trading and market participants Ruichang LU ( 卢 瑞 昌 ) Department of Finance Guanghua School of Management Peking University Overview Trading Stock Understand trading order Trading cost Margin

### FIN 432 Investment Analysis and Management Review Notes for Midterm Exam

FIN 432 Investment Analysis and Management Review Notes for Midterm Exam Chapter 1 1. Investment vs. investments 2. Real assets vs. financial assets 3. Investment process Investment policy, asset allocation,

### INVESTMENT TERM GLOSSARY

A Accrued Interest - Interest that has been earned but not yet credited to a bond or other fixed-income investment, such as a certificate of deposit. Active Management The use of professional investment

### Suggested Answers to Discussion Questions

Suggested Answers to Discussion Questions 1. Arguments for Mutual Fund Ownership Greater level of diversification Professional management Establish an investment program with a limited amount of capital

### A GUIDE TO MUTUAL FUND INVESTING

Many investors turn to mutual funds to meet their long-term financial goals. They offer the benefits of diversification and professional management and are seen as an easy and efficient way to invest.

### A guide to INVESTMENT TRUSTS. We ve been investing successfully since 1888. We re on the right course to invest for generations.

A guide to INVESTMENT TRUSTS We ve been investing successfully since 1888. We re on the right course to invest for generations. 2 A guide to Investment Trusts Contents 3 Investment Trusts explained 4 Differences

### DUKE UNIVERSITY Fuqua School of Business. FINANCE 351 - CORPORATE FINANCE Problem Set #4 Prof. Simon Gervais Fall 2011 Term 2.

DUK UNIRSITY Fuqua School of Business FINANC 351 - CORPORAT FINANC Problem Set #4 Prof. Simon Gervais Fall 2011 Term 2 Questions 1. Suppose the corporate tax rate is 40%. Consider a firm that earns \$1,000

### Introduction to Indices and Mutual Funds

Introduction to Indices and Mutual Funds Week 2: Chapter 2, 4 Nikunj Kapadia 1 Market Indices (Chapter 2) What is an index? Why are stock market indices important? What are the difference ways in which

### Asset Allocation Fund: Mutual fund that holds varying percentages of stock, bonds, and cash in its portfolio.

INVESTMENT GLOSSARY One of the most common roadblocks to getting started on a financial or investment plan is the process of learning a new language full of big words and legal terms. The following glossary

### BASKET A collection of securities. The underlying securities within an ETF are often collectively referred to as a basket

Glossary: The ETF Portfolio Challenge Glossary is designed to help familiarize our participants with concepts and terminology closely associated with Exchange- Traded Products. For more educational offerings,

### Return on Equity has three ratio components. The three ratios that make up Return on Equity are:

Evaluating Financial Performance Chapter 1 Return on Equity Why Use Ratios? It has been said that you must measure what you expect to manage and accomplish. Without measurement, you have no reference to

### Stock Dividends. Stock Dividends and Stock Splits. Amount of Stock Dividend. Created in 2006 By Michael Worthington Elizabeth City State University

Stock Dividends and Stock Splits Created in 2006 By Michael Worthington Elizabeth City State University Stock Dividends Stock Dividends consist of additional shares of issued to current stockholders (instead

### Balanced fund: A mutual fund with a mix of stocks and bonds. It offers safety of principal, regular income and modest growth.

Wealth for Life Glossary Aggressive growth fund: A mutual fund that aims for the highest capital gains. They often invest in smaller emerging companies that offer maximum growth potential. Adjustable Rate

### END-OF-CHAPTER SOLUTIONS

END-OF-CHAPTER SOLUTIONS Fundamentals of Investments, 4 th edition Jordan and Miller 10/4/006 Chapter 1 A Brief History of Risk and Return Concept Questions 1. For both risk and return, increasing order

### An Overview of the US Closed-End Fund Market. By Paul Mazzilli

An Overview of the US Closed-End Fund Market By Paul Mazzilli Introduction Closed-end funds (CEFs) are professionally managed investment companies that offer investors various unique benefits. They offer

### Understanding Leverage in Closed-End Funds

Closed-End Funds Understanding Leverage in Closed-End Funds The concept of leverage seems simple: borrowing money at a low cost and using it to seek higher returns on an investment. Leverage as it applies

Advantages and disadvantages of investing in the Stock Market There are many benefits to investing in shares and we will explore how this common form of investment can be an effective way to make money.

### Underlier Filters Category Data Field Description

Price//Capitalization Market Capitalization The market price of an entire company, calculated by multiplying the number of shares outstanding by the price per share. Market Capitalization is not applicable

### Unit Investment Trusts

a guide to Unit Investment Trusts A unit investment trust (UIT) is a registered investment company that buys and holds a generally fixed portfolio of stocks, bonds, or other securities. Table of Contents

### Mutual Fund Investing Exam Study Guide

Mutual Fund Investing Exam Study Guide This document contains the questions that will be included in the final exam, in the order that they will be asked. When you have studied the course materials, reviewed

### University of Rio Grande Fall 2010

University of Rio Grande Fall 2010 Financial Management (Fin 20403) Practice Questions for Midterm 1 Answers the questions. (Or Identify the letter of the choice that best completes the statement if there

### FIN 3210 Personal Finance 1. Starting a Brokerage Account. Full service brokers Discount brokers Deep-discount brokers Online brokers

FIN 3210 Personal Finance 1 Starting a Brokerage Account Full service brokers Discount brokers Deep-discount brokers Online brokers Investor Protection Security Investors Protection Corporation (SIPC):

### BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE Professor Chris Droussiotis LECTURE 2. Chapter 3 SECURITIES MARKETS

LECTURE 2 Chapter 3 SECURITIES MARKETS IPO Required Docs: Amendment to the certificate of incorporation Corporate Governance (Private are far less formal responsibility) Recruit Independent Board Members

### Homework Margin Purchases. Dr. Patrick Toche

Homework Margin Purchases Dr. Patrick Toche A dagger indicates a possibly more challenging question. Maintenance Margin 1. You are bullish on Telecom stock. The current market price is \$50 per share, and

### There are two types of returns that an investor can expect to earn from an investment.

Benefits of investing in the Stock Market There are many benefits to investing in shares and we will explore how this common form of investment can be an effective way to make money. We will discuss some

### Mutual Fund Investing At NYLIFE Securities What are the Costs of Investing in Mutual Funds? What are Mutual Fund Share Classes?

Mutual Fund Investing At NYLIFE Securities Mutual funds are a popular investment choice that can help clients achieve their financial goals. NYLIFE Securities LLC offers clients over 10,000 individual

### 2-8. Identify whether each of the following items increases or decreases cash flow:

Problems 2-8. Identify whether each of the following items increases or decreases cash flow: Increase in accounts receivable Increase in notes payable Depreciation expense Increase in investments Decrease

### IF YOU HAVE THE TIME The Long-Term Potential of Closed-End Funds vs. Open-End Funds

IF YOU HAVE THE TIME The Long-Term Potential of Closed-End Funds vs. Open-End Funds Authored by Robert Kenyon, Managing Director, Business Development Closed-end funds have been on the market since 1893,

### EC372 Bond and Derivatives Markets Topic #5: Options Markets I: fundamentals

EC372 Bond and Derivatives Markets Topic #5: Options Markets I: fundamentals R. E. Bailey Department of Economics University of Essex Outline Contents 1 Call options and put options 1 2 Payoffs on options

### INVESTMENT DICTIONARY

INVESTMENT DICTIONARY Annual Report An annual report is a document that offers information about the company s activities and operations and contains financial details, cash flow statement, profit and

### CHAPTER 21: OPTION VALUATION

CHAPTER 21: OPTION VALUATION 1. Put values also must increase as the volatility of the underlying stock increases. We see this from the parity relation as follows: P = C + PV(X) S 0 + PV(Dividends). Given

### Hedging with Futures and Options: Supplementary Material. Global Financial Management

Hedging with Futures and Options: Supplementary Material Global Financial Management Fuqua School of Business Duke University 1 Hedging Stock Market Risk: S&P500 Futures Contract A futures contract on

### Hedging. An Undergraduate Introduction to Financial Mathematics. J. Robert Buchanan. J. Robert Buchanan Hedging

Hedging An Undergraduate Introduction to Financial Mathematics J. Robert Buchanan 2010 Introduction Definition Hedging is the practice of making a portfolio of investments less sensitive to changes in

### Virtual Stock Market Game Glossary

Virtual Stock Market Game Glossary American Stock Exchange-AMEX An open auction market similar to the NYSE where buyers and sellers compete in a centralized marketplace. The AMEX typically lists small

### Financial Highlights Data Overview

Financial Highlights Data Overview Published: January 2013 Updated March 27, 2013 Institutional Shareholder Services Inc. Copyright 2013 by ISS www.issgovernance.com Table of Contents FINANCIAL HIGHLIGHTS

### Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased.

Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold

### Types of Stock. Common Stock most common form of stock. Preferred Stock. Companies may customize other classes of stock.

Stock Market Basics What are Stocks? Stock is ownership in a publicly traded company. Stock is a claim on the company s assets and earnings. The more stock you have, the greater your claim as an owner.

### SPDR S&P 400 Mid Cap Value ETF

SPDR S&P 400 Mid Cap Value ETF Summary Prospectus-October 31, 2015 Before you invest in the SPDR S&P 400 Mid Cap Value ETF (the Fund ), you may want to review the Fund's prospectus and statement of additional

### Investing in Mutual Funds

Investing in Mutual Funds C H A P T E R 17 Barb Branson thought she knew a good thing when she saw it. After researching some mutual funds, she picked one that had a great five-year track record. With

### Rigensis Bank AS Information on the Characteristics of Financial Instruments and the Risks Connected with Financial Instruments

Rigensis Bank AS Information on the Characteristics of Financial Instruments and the Risks Connected with Financial Instruments Contents 1. Risks connected with the type of financial instrument... 2 Credit

### Course 1: Evaluating Financial Performance

Excellence in Financial Management Course 1: Evaluating Financial Performance Prepared by: Matt H. Evans, CPA, CMA, CFM This course provides a basic understanding of how to use ratio analysis for evaluating

### 9 Questions Every ETF Investor Should Ask Before Investing

9 Questions Every ETF Investor Should Ask Before Investing 1. What is an ETF? 2. What kinds of ETFs are available? 3. How do ETFs differ from other investment products like mutual funds, closed-end funds,

### Financial Planning Relationship Disclosure

Financial Planning Relationship Disclosure Thank you for choosing TD Wealth Financial Planning as your wealth management provider. At TD Wealth we are committed to helping our clients meet their financial

### Percent, Sales Tax, & Discounts

Percent, Sales Tax, & Discounts Many applications involving percent are based on the following formula: Note that of implies multiplication. Suppose that the local sales tax rate is 7.5% and you purchase

### NAEPC was notified by Jagen Investments LLC that one of NAEPC s regional councils posted an article on its website purportedly written by Gary Powell

NAEPC was notified by Jagen Investments LLC that one of NAEPC s regional councils posted an article on its website purportedly written by Gary Powell of CenterG, Inc. and published by Cannon Financial

### Important Information about Closed-End Funds and Unit Investment Trusts

Robert W. Baird & Co. Incorporated Important Information about Closed-End Funds and Unit Investment Trusts Baird has prepared this document to help you understand the characteristics and risks associated

### Managed funds. Plain Talk Library

Plain Talk Library Contents Introduction to managed funds 5 What is a managed fund and how does it work? 6 Types of managed funds 12 What are the benefits of managed funds? 15 Choosing a managed fund

### Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

Accounting Fundamentals Lesson 5 5.0 Receivables & Investments Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

### Investment Analysis (FIN 383) Fall 2009. Homework 2

Investment Analysis (FIN 383) Fall 2009 Homework 2 Instructions: please read carefully You should show your work how to get the answer for each calculation question to get full credit The due date is Thu,

### Practice Questions for Midterm II

Finance 333 Investments Practice Questions for Midterm II Winter 2004 Professor Yan 1. The market portfolio has a beta of a. 0. *b. 1. c. -1. d. 0.5. By definition, the beta of the market portfolio is

### Fund Types. Mutual Funds. Chapter 4 Mutual Funds. Mutual Funds. Mutual Funds. Investment Companies and Fund Types

Chapter 4 Mutual Funds 4 Mutual Funds Investment Companies and Fund Types Mutual Fund Operations Mutual Fund Costs and Fees Short-Term Funds Long-Term Funds Mutual Fund Performance Closed-End Funds and

### WHAT ARE MUTUAL FUNDS?

MUTUAL FUNDS ASSOCIATION OF PAKISTAN WHAT ARE MUTUAL FUNDS? Mutual Funds Association of Pakistan is the trade body duly licensed by the Government of Pakistan for the mutual fund industry in Pakistan.

### MUTUAL FUNDS (UNIT TRUSTS, OEICS, INVESTMENT TRUSTS)

1 CHAPTER 9 MUTUAL FUNDS (UNIT TRUSTS, OEICS, INVESTMENT TRUSTS) The objective of this chapter is to provide knowledge of: 1. The purposes of mutual funds. 2. Unit trusts, OEICs, and investment trusts.

### Coupon Bonds and Zeroes

Coupon Bonds and Zeroes Concepts and Buzzwords Coupon bonds Zero-coupon bonds Bond replication No-arbitrage price relationships Zero rates Zeroes STRIPS Dedication Implied zeroes Semi-annual compounding

### Nine Questions Every ETF Investor Should Ask Before Investing

Nine Questions Every ETF Investor Should Ask Before Investing UnderstandETFs.org Copyright 2012 by the Investment Company Institute. All rights reserved. ICI permits use of this publication in any way,

### Section 8.1. I. Percent per hundred

1 Section 8.1 I. Percent per hundred a. Fractions to Percents: 1. Write the fraction as an improper fraction 2. Divide the numerator by the denominator 3. Multiply by 100 (Move the decimal two times Right)

### Business 2019. Fundamentals of Finance, Chapter 6 Solution to Selected Problems

Business 209 Fundamentals of Finance, Chapter 6 Solution to Selected Problems 8. Calculating Annuity Values You want to have \$50,000 in your savings account five years from now, and you re prepared to

### Understanding the 2013 Year-End Distributions Table

Understanding the 2013 Year-End Distributions Table Year-end distribution overview Q. What is Fidelity doing this year with regard to providing information on mutual fund distributions to Fidelity fund

### SPDR S&P Software & Services ETF

SPDR S&P Software & Services ETF Summary Prospectus-October 31, 2015 XSW (NYSE Ticker) Before you invest in the SPDR S&P Software & Services ETF (the Fund ), you may want to review the Fund's prospectus

### Retirement Investing: Analyzing the Roth Conversion Option*

Retirement Investing: Analyzing the Roth Conversion Option* Robert M. Dammon Tepper School of Bsiness Carnegie Mellon University 12/3/2009 * The author thanks Chester Spatt for valuable discussions. The

### 11 Option. Payoffs and Option Strategies. Answers to Questions and Problems

11 Option Payoffs and Option Strategies Answers to Questions and Problems 1. Consider a call option with an exercise price of \$80 and a cost of \$5. Graph the profits and losses at expiration for various

### SPDR Wells Fargo Preferred Stock ETF

SPDR Wells Fargo Preferred Stock ETF Summary Prospectus-October 31, 2015 PSK (NYSE Ticker) Before you invest in the SPDR Wells Fargo Preferred Stock ETF (the Fund ), you may want to review the Fund's prospectus

### Final Exam MØA 155 Financial Economics Fall 2009 Permitted Material: Calculator

University of Stavanger (UiS) Stavanger Masters Program Final Exam MØA 155 Financial Economics Fall 2009 Permitted Material: Calculator The number in brackets is the weight for each problem. The weights

### Manual for SOA Exam FM/CAS Exam 2.

Manual for SOA Exam FM/CAS Exam 2. Chapter 7. Derivatives markets. c 2009. Miguel A. Arcones. All rights reserved. Extract from: Arcones Manual for the SOA Exam FM/CAS Exam 2, Financial Mathematics. Fall

### Unit 6 Receivables. Receivables - Claims resulting from credit sales to customers and others goods or services for money,.

Unit 6 Receivables 7-1 Receivables - Claims resulting from credit sales to customers and others goods or services for money,. Oral promises of the purchaser to pay for goods and services sold (credit sale;

LPL FINANCIAL RESEARCH Exchange Traded Funds February 16, 2012 What They Are, What Sets Them Apart, and What to Consider When Choosing Them Overview 1. What is an ETF? 2. What Sets Them Apart? 3. How Are

### Expected default frequency

KM Model Expected default frequency Expected default frequency (EDF) is a forward-looking measure of actual probability of default. EDF is firm specific. KM model is based on the structural approach to

Client Education Learn About Exchange-Traded Funds 2 What is an ETF? 6 How do ETFs work? 12 How do ETFs compare with other investments? 2 Exchange-traded funds, or ETFs, are attracting more and more attention

### Goals. Investment Companies. History. Closed versus Open Funds

Goals Investment Companies Economics 71a: Spring 2007 Mayo 17, Malkiel 8 Lecture 4.8 History Closed and open funds Performance and fees Types of funds Index funds ETF s Hedge funds How well do funds perform?

### Chapter 1 The Measurement of Interest

Interest: the compensation that a borrower of capital pays to a lender of capital for its use. It can be viewed as a form of rent that the borrower pays to the lender to compensate for the loss of use

### Loan Disclosure Statement

ab Loan Disclosure Statement Risk Factors You Should Consider Before Using Margin or Other Loans Secured by Your Securities Accounts This brochure is only a summary of certain risk factors you should consider

Exchange Traded Funds (ETFs) Advisers guide to ETFs and their potential role in client portfolios This document is directed at professional investors and should not be distributed to, or relied upon by

### COMMON INVESTMENT TERMS EXPLAINED ALL ABOUT REAL ESTATE, MUTUAL FUNDS, RETIREMENT PLANNING, STOCKS, AND BONDS

COMMON INVESTMENT TERMS EXPLAINED ALL ABOUT REAL ESTATE, MUTUAL FUNDS, RETIREMENT PLANNING, STOCKS, AND BONDS 1 TABLE OF CONTENTS Mutual Fund Terms... 3 Retirement and Education Terms... 7 Stock Market