Assignment 2 Exam 2026 With All Correct Answers Success Guaranteed
An open-end fund has a net asset value of $11.20 per share. It is sold with a front-end load of 5%. What
is the offering price?Answer(NAV/(1-FRONTEND)) it is 11.79
The Closed Fund is a closed-end investment company with a portfolio currently worth $295 million. It
has liabilities of $4 million and 6 million shares outstanding.
Required:
a. What is the NAV of the fund? (Round your answer to 2 decimal places.)Answer(Market value assets-
Liabilities)/(number of shares outstanding)
Assets (portfolio value) = $295 million Liabilities = $4 million Number of Shares Outstanding = 6 million
48.5
The Closed Fund is a closed-end investment company with a portfolio currently worth $295 million. It
has liabilities of $4 million and 6 million shares outstanding.
b. If the fund sells for $45 per share, what is its premium or discount as a percent of NAV? (Input the
amount as a positive value. Do not round your intermediate calculations. Round your answer to 2
decimal places.)AnswerPremium Discount = (Market Price per Share - Nav Per Share)/(NAV PER SHARE)
* 100%
Market Price per Share = $45 NAV per Share = $48.50
-7.22% discount
A closed-end fund starts the year with a net asset value of $28. By year-end, NAV equals $29.70. At the
beginning of the year, the fund is selling at a 3% premium to NAV. By the end of the year, the fund is
selling at a 8% discount to NAV. The fund paid year-end distributions of income and capital gains of
$3.10.
Required:
a. What is the rate of return to an investor in the fund during the year? (Do not round intermediate
calculations. Round your answer to 2 decimal places.)Answer1) (First NAV*PREMIUM)= x
2) (Year end NAV*PREMIUM)= y
, 3) X-Y= #
4) #+income added cap gains=$
5) $/X= Answer
5.49
A closed-end fund starts the year with a net asset value of $28. By year-end, NAV equals $29.70. At the
beginning of the year, the fund is selling at a 3% premium to NAV. By the end of the year, the fund is
selling at a 8% discount to NAV. The fund paid year-end distributions of income and capital gains of
$3.10.
b. What would have been the rate of return to an investor who held the same securities as the fund
manager during the year? (Round your answer to 2 decimal places.)Answer1) Year end NAV- Year start
NAV=X
2) cap allocation +X= Y
3) Y/Beggining NAV
Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.60%. Economy Fund
charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.40%. Assume the
rate of return on both funds' portfolios (before any fees) is 5% per year.
Required:
a. How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)AnswerLOADED FUND:
Total return (after fees)=ROR-(12b-1 fee) - Expense ratio)
103.4
Economy Fund:
BC front end load not back end
1) 100*front end load
2) Total return (after fees)=ROR-(12b-1 fee) - Expense =.046
3)
(.046*98+98) = answer
An open-end fund has a net asset value of $11.20 per share. It is sold with a front-end load of 5%. What
is the offering price?Answer(NAV/(1-FRONTEND)) it is 11.79
The Closed Fund is a closed-end investment company with a portfolio currently worth $295 million. It
has liabilities of $4 million and 6 million shares outstanding.
Required:
a. What is the NAV of the fund? (Round your answer to 2 decimal places.)Answer(Market value assets-
Liabilities)/(number of shares outstanding)
Assets (portfolio value) = $295 million Liabilities = $4 million Number of Shares Outstanding = 6 million
48.5
The Closed Fund is a closed-end investment company with a portfolio currently worth $295 million. It
has liabilities of $4 million and 6 million shares outstanding.
b. If the fund sells for $45 per share, what is its premium or discount as a percent of NAV? (Input the
amount as a positive value. Do not round your intermediate calculations. Round your answer to 2
decimal places.)AnswerPremium Discount = (Market Price per Share - Nav Per Share)/(NAV PER SHARE)
* 100%
Market Price per Share = $45 NAV per Share = $48.50
-7.22% discount
A closed-end fund starts the year with a net asset value of $28. By year-end, NAV equals $29.70. At the
beginning of the year, the fund is selling at a 3% premium to NAV. By the end of the year, the fund is
selling at a 8% discount to NAV. The fund paid year-end distributions of income and capital gains of
$3.10.
Required:
a. What is the rate of return to an investor in the fund during the year? (Do not round intermediate
calculations. Round your answer to 2 decimal places.)Answer1) (First NAV*PREMIUM)= x
2) (Year end NAV*PREMIUM)= y
, 3) X-Y= #
4) #+income added cap gains=$
5) $/X= Answer
5.49
A closed-end fund starts the year with a net asset value of $28. By year-end, NAV equals $29.70. At the
beginning of the year, the fund is selling at a 3% premium to NAV. By the end of the year, the fund is
selling at a 8% discount to NAV. The fund paid year-end distributions of income and capital gains of
$3.10.
b. What would have been the rate of return to an investor who held the same securities as the fund
manager during the year? (Round your answer to 2 decimal places.)Answer1) Year end NAV- Year start
NAV=X
2) cap allocation +X= Y
3) Y/Beggining NAV
Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.60%. Economy Fund
charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.40%. Assume the
rate of return on both funds' portfolios (before any fees) is 5% per year.
Required:
a. How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)AnswerLOADED FUND:
Total return (after fees)=ROR-(12b-1 fee) - Expense ratio)
103.4
Economy Fund:
BC front end load not back end
1) 100*front end load
2) Total return (after fees)=ROR-(12b-1 fee) - Expense =.046
3)
(.046*98+98) = answer
