1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
boyakko [2]
3 years ago
9

You purchased 1,000 shares of the New Fund at a price of $20 per share at the beginning of the year. You paid a front-end load o

f 4%. The securities in which the fund invests increase in value by 12% during the year. The fund's expense ratio is 1.2%. What is your rate of return on the fund if you sell your shares at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
Mazyrski [523]3 years ago
7 0

Answer:

6.37%

Explanation:

Rate of return

= (Aggregate investment value after one year - Investment value) / investment value   ----- equation 1

Cost of shares =number of shares* price per share

             = 1000* $20 =$20,000

Total amount invested = Purchasing cost /(1- front-end load)

               = $20,000 / (1-0.04)

                =$20,000 / 0.96 = $20,833.333

Investment value after one year

           = Total Investment*( 1+ price increase-expense ratio)

         = $20,000( 1 +0.12 -0.012)

          = $20,000(1.12-0.012) = $20,000 * 1.108 = $22,160

From equation 1 above

Rate of return = ($22,160 - $ 20,833.333) / $20,833.333

        $ 1,326.667 / $ 20,833.333

= 0.06368001701

  = 0.0637

Since rates of return are expressed as %, we multiply the result by 100 to get

  0.0637*100 =6.37%

My rate of return on the fund will be 6.37% if I sell the shares at the end of the year.

You might be interested in
Common Stock is 2.5 million shares with a current price of $42 per share; the beta of the stock is 1.34; the standard deviation
Kamila [148]

Answer:

the firm's cost of equity is 17.808%

Explanation:

A firm's cost of equity is the return expected by holders of Common Stock.

The Data available allows us to use the Capital Asset Pricing Model (CAPM) to determine the cost of Equity.

Cost of Equity = Risk Free Rate + Company`s Beta × Expected Return on Market Portfolio

                       = 2.8%+1.34×11.2%

                       = 17.808%

3 0
3 years ago
Read 2 more answers
What is the moral hazard​ problem?a. The problem that managers of a financial firm will take on riskier investments because they
s344n2d4d5 [400]

Moral Hazard occurs when a person increases its exposure to risk because someone else bears the the cost of those risk(Insurance companies)

Explanation:

Moral Hazard usually occurs when their is information asymmetry,the risk taking party has more information than the risk incurring party.

The financial crisis of 2008 is the best example of the Moral Hazard Problem.

The Moral Hazard Problem arises because the managers of the financial firm took over riskier investments because they believed that  the federal government will save them from the bankruptcy.

3 0
3 years ago
A residential property is greatly diminished in value because of the constant noise of jets taking off from a recently expanded
djverab [1.8K]

Answer:

A residential property is greatly diminished in value because of the constant noise of jets taking off from a recently expanded municipal airport. In order to be compensated for this loss, the owner could:

B.bring a suit alleging inverse condemnation

Explanation:

A law suit is a claim or legal problem taken to a court of law by an individual or organization rather than the authorities for a legal decision to be made. In the case above, the residential property diminished in value after constant noise of jets taking off from a recently expanded municipal airport. The loss in value is as a result of the recently expanded municipal airport and the property owner wants to be compensated for this loss.

In law, there are different terminologies and phrases that have specific meaning, some of them are as follows;

1. Inverse condemnation

Inverse condemnation is a case where a government entity takes private property or influences the value of that private property in one way or another then fails to compensate. In our case, this law suit can apply since the municipal airport is under the jurisdiction of the government and there action of expanding the airport caused a decline in value of neighboring residential property thus they should compensate the owner for this loss. The owner can bring a suit alleging inverse compensation.

3 0
3 years ago
Giving away points <br> Come quick
mezya [45]

Answer:

Crab

Explanation:

crab likes points

6 0
3 years ago
Read 2 more answers
Two eastern European countries formed a free trade agreement. As a result, one of the countries that used to produce its own pla
Aleonysh [2.5K]

Answer:

Trade creation

Explanation:

Trade creation is the process where there is increase in economics welfare as a result of joining a free trade area for example a customs Union.

Consumption experiences a shift from high cost producers to low cost producers causing expansion in trade.

In the given instance due to formation of free trade agreement, high cost plastic production is now replaced with low cost import of plastics from the other company.

There is a shift from high cost producers to low cost producers as a result of trade agreement between the two nations.

3 0
3 years ago
Other questions:
  • The effectiveness of a boycott depends on worker’s ability to do what?
    15·1 answer
  • Market segmentation involves aggregating prospective buyers into groups that __________ and will respond similarly to a marketin
    14·1 answer
  • Sweet Sue Foods has bonds outstanding with a coupon rate of 5.02 percent paid semiannually and sell for $1,948.34. The bonds hav
    15·1 answer
  • Which of the following is the least constructive approach when giving feedback? Be descriptive in your comments.
    13·1 answer
  • The Crockery Pottery Company completed the flexible budget analysis for the second​ quarter, which is given below.
    14·1 answer
  • Why does the government provide public goods and services, redistribute income, protect property rights, and resolve market fail
    14·1 answer
  • Felicia put $175 into a CD that pays 4% interest, compounded semiannually.
    13·1 answer
  • 32. How many significant accounting policies are listed under its Summary of Significant Accounting Policies
    11·1 answer
  • The amount of the estimated average income for a proposed investment of $73,000 in a fixed asset, giving effect to depreciation
    5·1 answer
  • Which of the following is not a correct way of calculating a liquidity ratio?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!