What is the nav of the fund

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Assignment Questions

Use a Cover Sheet, and. Upload to LiveText. Assignment consists of four (4) questions from Chapter 2.

Chapter 3 Questions

Question 1

A market order has:

Price uncertainty but not execution uncertainty.

Both price and execution uncertainty.

Execution uncertainty but not price uncertainty.

Briefly explain your choice.

Question 2

Bill Trader opened an account to sell short 1000 shares of BBQ Wholesalers. The initial margin requirement was 50% (interest-free). A year later, the share price has gone from $40 to $50, and the company has paid a dividend of $2.00 per share.

What is the remaining margin in the account?

If the maintenance margin requirement is 30%, will Bill Trader receive a margin call?

What is the rate of return on the investment?

Question 3

ABC has just sold 100,000 shares in an initial public offering. The underwriter's explicit fees were $70.000. The offering price for the shares was $50.00, but immediately upon issue, the price jumped to $53.00 a share.

What is your best guess to the total cost to ABC of the equity issue?

Is the entire cost of the underwriting a source of profit to the underwriters?

Question 4

If you place a stop-loss order to sell 100 shares of stock at $55.00 when the current price is $62.00, how much will you receive for each share if the price drops to $50?

$50.00

$55.00

$54.87

Cannot tell from the information given.

Chapter 4 Questions

Question 1

The Open Fund is a closed-end investment company with a portfolio currently worth $200 million. It has liabilities of $3 million and 5 million shares outstanding.

What is the NAV of the fund?

If the fund sells for $36.00 a share, what is its premium or discount as a percent of net asset value?

Question 2

The closed fund had average daily assets of $2.2 billion last year. The fund sold $400 million worth of stock and purchased $500 million during the year. What was it's turnover ratio?

Question 3

You purchased 1,000 shares of the New Fund at a price of $20 per share at the beginning of the year. You paid a front-end load of 4%. The securities in which the fund invests increase in value by 12% during the year. The fund's expense ratio is 1.2%.

What is your rate of return on the fund if you sell your shares at the end of the year?

Reference no: EM132055824

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