Concerned about being able to margin or short sell

Assignment Help Financial Management
Reference no: EM131521267

Suppose you just inherited $25,000 from your Aunt Louise. You have decided to invest in an S&P Index fund, but you haven't decided yet whether to use an ETF or a mutual fund. Suppose the ETF has an annual expense ratio of .09 percent, while the mutual fund charges .21 percent. The mutual fund has no load, but the ETF purchase would carry a $25 commission. Assuming this is a long-term holding and you are not concerned about being able to margin or short sell, which is the better approach?

Reference no: EM131521267

Questions Cloud

Describe the project that you would assign : Describe the project that you would assign to your quality improvement team to complete to prevent this from happening agai
What is profit or loss associated with copper : Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper?
Estimate the price earnings ratio : Suppose as stock analyst expect dividend payout of 30%, a cost of capital of 15%, and an expected growth rate of dividend of 5%, estimate the Price Earnings.
What is the incremental cost of going outside : What is the incremental cost of going outside versus conducting the survey as in the past?
Concerned about being able to margin or short sell : Assuming this is a long-term holding and you are not concerned about being able to margin or short sell, which is the better approach?
Discuss about the quality application tools : create a detailed project outline. Process to be improved o Team that knows the process . Current knowledge of the process
Analyze key reasons why third parties have never successful : Analyze key reasons why third parties have never been successful at the presidential level
Jeopardy clauses in the fifth amendment : Double jeopardy clauses in the Fifth Amendment make it impossible for a person to be tried of the same crime he'd been exonerated from in the past.
What is the incremental savings of buying the valves : Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; What is the incremental savings of buying the valves?

Reviews

Write a Review

Financial Management Questions & Answers

  Assumes reinvestments of interim cash flows

In capital budgeting, the IRR implicitly assumes reinvestments of interim cash flows at the IRR itself. First, discuss why this assumption is problematic. Then, explain how MIRR address this issue by presenting your own unique example with proper cal..

  Determined a certain pattern to the associated costs

Fieldspring’s city manager of public works has been reviewing flood data for his city and has determined a certain pattern to the associated costs.

  What is the inventory turnover rate

Your firm has sales of $628,000 and cost of goods sold of $452,000. At the beginning of the year, your inventory was $31,000. At the end of the year, the inventory balance was $33,000. What is the inventory turnover rate?

  Yen call options with a strike price

A speculator is considering the purchase of five three-month Japanese yen call options with a strike price of 96 cents per 100 yen. The premium is 1.35 cents per 100 yen. The spot price is 95.28 cents per 100 yen and the 90-day forward rate is 95.71 ..

  Calculate the financial break-even point

Calculate the financial break-even point: BEP= Fixed Costs/ (unit price – variable unit costs).

  Compute the present value of the non-constant dividends

Compute the present value of the non-constant dividends.

  What is the amount of the operating cash flow

Paul's Boats has sales of $680,000 and a Net Profit Margin of 5.2 percent. The annual depreciation expense is $74,000. The tax rate is 34 percent. What is the amount of the operating cash flow if the company has no long-term debt?

  The benchmark price-earnings ratio-cost of common stock

USF Inc. has earnings of $2.35 per share. The benchmark price-earnings (PE) ratio for the company is 18. What stock price would you consider appropriate? The risk-free rate is 3.09%, the market risk premium is 5.29%, and the stock’s beta is 1.13. Wha..

  Driven per year for leasing and buying to cost the same

How many kilometers must a car be driven per year for leasing and buying to cost the same? Use 10% interest and year-end cost. Leasing: $0.20 per kilometer Buying: $5000 purchase cost, 3-year life, salvage $1200. $0.04 per kilometer for gas and oil, ..

  What is the discounted payback period of each of projects

Your division is considering two investment projects, each of which requires an up-form expenditure of $25 million. You estimate that the cost of Capital is 10% and that the investments will produce the following after-tax cash flows (in millions of ..

  Coupon bond paying coupons semiannually is callable

A 25-year maturity, 8.1% coupon bond paying coupons semiannually is callable in six years at a call price of $1,105. The bond currently sells at a yield to maturity of 7.1% (3.55% per half-year). What is the yield to call? What is the yield to call i..

  What is high quality accounting numbers refer

How would I determine if the company's policy for determining useful lives in the presence of a lease renewal option yield high quality accounting numbers? What specifically would I need to look at, and what is "high quality accounting numbers" refer..

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