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A Japanese pension fund wants to invest ¥1 billion in U.S. equity. Its board of trustees must decide whether to invest in a commingled index fund tracking the S&P index or give the money to an active manager. The board learns that this active manager turns the portfolios over about twice a year. Given the size of the account, the overall transaction costs are likely to be an average of 0.75% of each transaction’s value. The active manager charges 0.5% in annual management fees, and the indexer charges 0.15%. By how much should the active manager outperform the index to cover the extra costs in the form of fees and transaction costs on the annual turnover?
A) 3.35%
B) 4.75%
C) 5.0%
D) 5.25%
Determine which stock has higher risk-adjusted returns according to the Sharpe index. Which stock has higher risk-adjusted returns according to the Treynor index? Show your work.
Do you believe that the revaluation of the Chinese yuan's was politically or economically motivated
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The times-interest-earned ratio always equals or exceeds the times-burden-covered ratio. All else equal, an increase in a company’s asset turnover will decrease its ROE.
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Ogden Mear did an excellent job saving for retirement. He was able to save $1,000,000 in an account that pays 5 percent per year. His plan was to eventually withdraw all his money by paying himself in equal instalments every six months for the next 2..
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