An investment in the money market fund

Assignment Help Finance Basics
Reference no: EM13309536


 You also can invest in a money market mutual fund with a 3.8 percent return and an expense ratio of 0.2 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon is 8 years?

I get how to set it up just cant figure out the rest.

(1 + 0.038 - 0.002)^2 = (1 - 0.045)(1 + R - 0.016)^2
(1+ 0.038 - 0.002)^8 = (1 - 0.045)(1 + R - 0.016)^8

Reference no: EM13309536

Questions Cloud

Determine the available tensile strength in kips : Determine the available tensile strength (Pa) in kips to the 1st decimal point for the A36 steel plate in accordance to the 14th Edition of AISC LRFD Specifications. The bolts are in standard holes. U = 1.0
Calculate the tension in the rope : A circle of rope of total mass 1kg and radius 1m is spinning at angular velocity 2.5 rad/sec about an axis through the center of the circle
What is m1 in ironmania : Assume that the following asset values (in millions of dollars) exist in Ironmania: Federal Reserve Notes in circulation = $700; Money market mutual funds (MMMFs) hold by individuals = $400; Corporate bonds = $300; Iron ore deposits = $50; Currenc..
Explain the method of initial rates for the reaction : The following set of data was obtained by the method of initial rates for the reaction: S2O8^2- (aq) + 3 I- (aq) ==> 2 SO4^2- (aq) + I3- (aq) What is the initial rate when S2O8^2- is 0.15M
An investment in the money market fund : An investment in the money market fund?
Explain reaction increased by raising the temperature : The rate constant of a chemical reaction increased from 0.100s^-1 to 2.90s^-1 upon raising the temperature from 25.0 degree celcius to 43.0 degree celcius
How far does the ping pong travel : A spring loaded gun is used to launch a ping pong ball (mass 4g) at an angle of 50 degrees with the horizontal. how far does the ping pong travel if it is launched from the ground
What fraction of the arterys area is obstructed : Blood with density 1.06 g/cm^3 and 10-kPa gauge pressure flows through an artery at 27cm/s. What fraction of the artery's area is obstructed
In designing the layout for an orthopedic hospital, : In designing the layout for an orthopedic hospital, describe how the design might be affected by the most important flow component being designated to be either patients, doctors, nurses, or access to expensive diagnostic equipment such as x-ray, cat..

Reviews

Write a Review

Finance Basics Questions & Answers

  Prepare a monthly production schedule and a monthly summary

Prepare a monthly production schedule and a monthly summary of cash payments for January thru June . Volt produced 600 units in December.

  Calculate the present margin position

Calculate the present margin position  of Andre's account.

  At what interest rate would you be indifferent

At interest rates above/below this break-even rate, which investment would you choose and why?

  How low would the interest rate on the loan

How low would the interest rate on the loan with the compensating balance have to be for you to choose it?

  What is the variance of these returns

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 2 percent, -12 percent, 27 percent, 22 percent, and 18 percent. What is the variance of these returns?

  How much money will you invest in stock x

If your goal is to create a portfolio with an expected return of 12.53 percent, how much money will you invest in Stock X ? In Stock Y?

  What is the net income under the worst case scenario

The tax rate is 34 percent. The sale price is estimated at $15.00 a unit, give or take 4 percent.

  Emerging issues task force-multiple exchange rates

Describe how the Emerging Issues Task Force influences Generally Accepted Accounting Standards. Describe the principal issue related to accounting for multiple exchange rates. Describe the conclusion that the EITF reached related to the issue and how..

  What is the difference in the annual inflation rates

Suppose the current exchange rate for the Russian ruble is RUB 30.15. The expected exchange rate in three years is RUB 33.86. Assume that the anticipated inflation rate is constant for both countries.

  Why have high inflation rates tended to be associated

Historically, why have high inflation rates tended to be associated with high nominal interest rate?

  What is the best estimate of the nominal interest rate

Assuming that interest rates in the economy are expected to remain at their current level, what is the best estimate of the nominal interest rate on new bonds? Round your answer to two decimal places.

  How long do you have to wait to buy your yacht

You have $90000 saved today and want to purchase a new yacht when your money grows to $300000. If you can earn 10 percent on your investments, how long do you have to wait to buy your yacht?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd