Reference no: EM13912589
Net Asset Value, Rate of Return, and Mutual Fund Investment Strategies to Diversify Portfolio
Part I:
The net asset value (NAV) of the fund and rate of return to an investor in the fund are the two important concepts of mutual fund investment. Understanding the calculations of NAV and the rate of return are important to make investment decisions in mutual funds and to choose the best mutual fund investment strategies. To calculate NAV and rate of return, you have been provided the following hypothetical information on ProShares UltraShort Silver (ZSL) [https://ca.finance.yahoo.com/q?s=ZSL&ql=1]:
- Market value of assets in the beginning of the year (2011): $200,000,000
- Total liabilities: $10,000,000
- Number of shares outstanding: 17,393,910
- Net asset value (NAV) by the end of the year (2011): $10.94
- Distribution of income and capital gain per share/unit: $0.23
Based on the above information:
i) What was the net asset value (NAV) of the fund in the beginning of the year?
NAV = (Market value of assets - liabilities) / Shares outstanding
ii) What was the rate of return to an investor in the fund?
Rate of Return = (NAV1 - NAV0 + Income and capital gain distributions) / NAV0
Part II:
1. Assume you have set aside a certain amount of money to invest in mutual funds, and are trying to decide how to distribute your investment between actively managed funds and passively managed funds. To do this, you are going to need to do some research on the topic, looking into performance trends, forecasts, individual vs. group capabilities, and a host of other factors. You will also need to know something about the economic climate, prospects for the future, and the state of the market - as well as attend to your own priorities and investment goals and strategies.
2. Based on your analysis and findings, which investment strategy is better (Active or passive)? Which investment strategy would you recommend to other investors? Please explain your reasoning.
3. Based on the rate of return (Part I), would you invest in ProShares UltraShort Silver (ZSL) fund? Please explain your reasoning in brief.
Now look at the current performance (I.e., year to date return) of ProShares UltraShort Silver (ZSL) fund [https://ca.finance.yahoo.com/q?s=ZSL&ql=0 ; https://ca.finance.yahoo.com/q/pm?s=ZSL] and iShares Russell 2000 Index (IWM) [https://ca.finance.yahoo.com/q?s=IWM&ql=1 ; https://ca.finance.yahoo.com/q/pm?s=IWM].
4. Which fund is performing better? Based on the current performance, which professional fund manager is more effective to generate higher rate of return? Is it fund manager of ProShares UltraShort Silver or iShares Russell 2000 Index?
|
Does it matter whether the transfer is to a c corporation
: You can use section 351 for asset protection by exchange your assets for stock in a corporation. That asset is no longer at risk to your personal creditors. Is this true? Does it matter whether the transfer is to a C Corporation or an S Corporatio..
|
|
Advise martin of the tax consequences
: Advise Martin of the tax consequences that will result to him on these facts. You need to consider both the 2012-2013 and 2013-2014 income years.
|
|
Acceleration due to gravity on the surface
: At what altitude above the earth's surface would the acceleration due to gravity be 4.9m/s2? Assume the radius of the earth is 6.4 x 10 raise to power 6 m and the acceleration due to gravity on the surface of the earth is 9.8m/s2
|
|
Tension in the chord connecting the masses
: In a system of the Atwood machine with masses of 6kg and 10kg. (a) What is the tension in the chord connecting the masses?
|
|
What was the rate of return to an investor in the fund
: Which fund is performing better? Based on the current performance, which professional fund manager is more effective to generate higher rate of return? Is it fund manager of ProShares UltraShort Silver or iShares Russell 2000 Index?
|
|
Tax return project
: Day care expenses, love n learn , 51-666666, 222 kiddie lane, dover, de. 19901 $4,270 real estate taxes $950 2012 state income taxes on sch a were $3075 & total itemized deductions were $14,925. In 2013 they received a $210 refund of their state in..
|
|
Prove dijkstras token ring reaches legitimate configuration
: Prove that Dijkstra's token ring reaches a legitimate configuration in O(N2) steps. Shorten the analysis by giving a single norm function, quadratically bounded in N, that decreases with every step of the algorithm.
|
|
Calculate the angle of inclination of the track
: A racing car of mass 1000kg moves around a banked track at a constant speed of 30ms. Assuming the total reaction at the wheels is normal to the track and the horizontal radius is 100m. Calculate the angle of inclination of the track to the horizon..
|
|
Straight line with constant speed
: A cart moving horizontally along a straight line with constant speed of 30 m/s. A projectile is fired from the moving cart in such a way that it will return to the cart has moved 80 m. At what speed (relative to the cart) and at what angle (to the..
|