Question

In: Finance

1. Compare the performance of the two equity funds (Fund A and Fund B), based on...

1. Compare the performance of the two equity funds (Fund A and Fund B), based on the information given below.

Fund

Average Return (%)

Standard deviation of returns (%)

Beta

A

B

19.5

15.7

15.5

9.5

1.5

1.2

Additional information:

The risk-free rate is 5% and the return on the market index is 12%. The tracking error is 8.5% for Fund A, and 4% for Fund B.    Evaluate and discuss.

2. Jason and Mary purchase a house for $550,000. They obtain a home loan for 80% of the purchase price. They wish to pay off the mortgage monthly over 25 years. Assume a fixed interest rate of 4.5% p.a.   What will be the amount of each monthly repayment?


show all working please

Solutions

Expert Solution


Related Solutions

1. Compare the performance of the two equity funds (Fund A and Fund B), based on...
1. Compare the performance of the two equity funds (Fund A and Fund B), based on the information given below. Fund Average Return (%) Standard deviation of returns (%) Beta A B 19.5 15.7 15.5 9.5 1.5 1.2 Additional information: The risk-free rate is 5% and the return on the market index is 12%. The tracking error is 8.5% for Fund A, and 4% for Fund B.    Evaluate and discuss. PLEASE SHOW ALL WORING AND FORMULA USED TO ANSWER THIS...
1. Compare the performance of the two equity funds (Fund A and Fund B), based on the information given below.
  1. Compare the performance of the two equity funds (Fund A and Fund B), based on the information given below. Fund Average Return (%) Standard deviation of returns (%) Beta A B 19.5 15.7 15.5 9.5 1.5 1.2 Additional information: The risk-free rate is 5% and the return on the market index is 12%. The tracking error is 8.5% for Fund A, and 4% for Fund B.    Evaluate and discuss.
There are two mutual funds, the first is an equity fund and the second is a...
There are two mutual funds, the first is an equity fund and the second is a long-term corporate bond fund. It is possible to borrow or to lend limitless sums safely at 1.25%pa. The data on the risky funds are as follows: Fund Expected return Expected standard deviation Equity Fund 8% 16% Bond Fund 3% 5% The correlation coefficient between the fund returns is 0.10 Draw the capital allocation line (CAL) of your portfolio on an expected return-standard deviation diagram....
1) Consider two different hedge funds with the following data related to performance: Hedge fund             ...
1) Consider two different hedge funds with the following data related to performance: Hedge fund              Alpha           Beta Fund A                       5%            1.6 Fund B                                   3%            0.8 Assuming that beta is consistent with the type of investing we expected in both cases, which fund performed better. A. Fund A, because it had the higher return B. Fund A, because it had the higher alpha C. Fund B, because its alpha is more impressive than Fund A...
You are an investment manager considering two mutual funds. The first is an equity fund and...
You are an investment manager considering two mutual funds. The first is an equity fund and the second is a long-term corporate bond fund. It is possible to borrow or to lend limitless sums safely at 1.25%pa. The data on the risky funds are as follows: Fund Expected return Expected standard deviation Equity Fund 8% 16% Bond Fund 3% 5% The correlation coefficient between the fund returns is 0.10 a You form a risky portfolio P that is equally weighted...
Answer these two questions based on all three of venture capital funds, private equity funds, and...
Answer these two questions based on all three of venture capital funds, private equity funds, and hedge funds please!!!  3. What is the legal structure of funds, i.e. how are they structured? What is the means by which most fund managers are compensated?              4. Funds are lightly regulated by the SEC or Federal Reserve. What do you think some of the benefits and risks of that light regulation might be?
Alex has two funds A and B. The annual return of fund A is denoted by...
Alex has two funds A and B. The annual return of fund A is denoted by X (in %) while the annual return of fund B is denoted by Y (in %) . Assume X ∼ U (−10, 20) and Y ∼ N (10, 50). Further, suppose the probability that both stocks A and B have positive annual returns is 0.6. Find the probability that stock A has a negative return. Find the probability that stock B has a positive...
Describe the following types of funds: Growth fund Value fund Equity-income fund Balanced fund
Describe the following types of funds: Growth fund Value fund Equity-income fund Balanced fund
Compare the financial performance of the two organizations and provide suggestions (based on the comparison) for...
Compare the financial performance of the two organizations and provide suggestions (based on the comparison) for the Walden Conservatory of Music, both from a financial and operational perspective. In MEMO format. New England Conservatory of Music Based on 2017 Form 990 Liquid Funds Indicator = 4.25 months Debt to Asset Ratio= 18.9% Debt to NA ratio = 1.239 Program Service Ratio = 85.9% Savings Indicator = 22.5% Current Ratio = 5.36 Defensive Interval = 31.19 Liquid Funds Amount = No...
Compare the financial performance of the two organizations and provide suggestions (based on the comparison) for...
Compare the financial performance of the two organizations and provide suggestions (based on the comparison) for the Walden Conservatory of Music, both from a financial and operational perspective. In Memo Format. New England Conservatory of Music (NEC) Based on 2017 Form 990 Liquid Funds Indicator = 4.25 months Debt to Asset Ratio= 18.9% Debt to NA ratio = 123.9% Program Service Ratio = 85.9% Savings Indicator = 22.5% Current Ratio = 3.45 Defensive Interval = 3.24 Liquid Funds Amount =...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT