Assume a hedge fund has a fee structure of 4 plus 25%. What return is the hedge fund required to generate on the managed portfolio (before fees) if it is to provide investors with a return of 15% net of fees?
Q: Is there a difference between arithmetic and geometric average returns? Is it true that they converg...
A: Geometric average is generally used by investment professionals to measure the performance of portfo...
Q: Long-Term Investments This exercise is based on the following table, which lists interest rates on...
A: US yield (r) = 2.5% per annum = 0.20833% per month Investment amount (P) = $10800 Let n = Months to ...
Q: Suppose the interest rate on a 3-year Treasury Note is 2.25%, and 5-year Notes are yielding 4.00%. B...
A: To calculate the 2-year treasury note market rate, it is required to use the following formula: PVF ...
Q: Recycle America Inc. has the opportunity to trade 8,000 pounds of plastic pellets made from recycled...
A:
Q: A telemarketing company bought a new office space for Php720,000 downpayment and monthly installment...
A: Down payment (DP) = Php720,000 Monthly payment (P) = Php40,000 Period (n) = 42 Months Interest rate ...
Q: Lackson PLC and Hardy Corp. both have 8 percent coupon bonds outstanding, with semiannual interest p...
A: Assuming Face value of bond = 100 Price of bond = 100 = Par value Coupon = Coupon Rate / 2 × Par Val...
Q: Bob has $2,500 invested in a bank that pays 1% annually. How long will it take for his funds to doub...
A: Given, 2500 invested now Amount doubled = 2500 + 2500 = 5000 So, Maturity Value = 5000
Q: my house cost $249,900 my down payment is 20% my interest rate 3.65% my loan type is 30 years. what ...
A: House Cost = $249,900 Down Payment = 20% Interest Rate = 3.65% Time Period = 30 Years
Q: Candy Company had sales of $320,000 and cost of goods sold of $112,000. What is the gross profit mar...
A: Gross Profit ratio = [(Sales - Cost of goods sold)/Sales]
Q: Brief Exercise 3-5 Determine accrual-basis and cash-basis net income (LO3-1, 3- 2) Rebel Technology ...
A: Under cash basis accounting, only cash received and cash payments will be considered for calculation...
Q: Finding the total interest of a loan is similar to finding the total interest in an annuity's
A: When you take a loan then you have to make payments towards the principal amount as well as towards ...
Q: You own a portfolio that is 23 percent invested in Stock X, 38 percent in Stock Y, and 39 percent in...
A: Stock Weight Return X 23% 11% Y 38% 14% Z 39% 16%
Q: The future value of an investment is Php5,500,000 while its present value is Php3,500,000. It has a ...
A: Let the quarterly rate = r n = 13 years = 52 quarters Future value (F) = Php 5500000 Present value (...
Q: An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks. Consi...
A: The ETF is trading at $366. The current price of IBM is $121.57. The current price of MRK is $36.59....
Q: If $1200 is due on September 25, 1976, find the present value on June 27, 1976, if the discount rate...
A: Present Value = Future Value / 1 + (r * t)Where r = 7%t = time = (27 June 1976 to 25 September 1976...
Q: 13.) A bond has an annual 8 percent coupon rate, a maturity of 10 years, a face value of ST000 and m...
A: Yield to maturity (YTM) is the total rate of return received by a bond after it has made all interes...
Q: Holtzman Clothiers's stock currently sells for $29.00 a share. It just paid a dividend of $3.50 a sh...
A: In order to calculate the price of the stock, firstly we will have to calculate the required rate of...
Q: 6. Mommy Hai-dee, Inc. as of yearend of 2019 has a Total Working Capital of Php 3,000,000.00 and wit...
A: In the book value method, we find the book value of the firm, which is considered as the value of th...
Q: On Feb 1, 2022, the yield (nominal interest rate) on the Canadian government-issued 10-year bond was...
A: Real interest rate has been adjusted to remove the effects of inflation while the nominal interest r...
Q: 5. David was having a heated argument with Sue that the business should consider more than sharehold...
A: The question is based on the concept of different approaches used in corporate finance for the finan...
Q: ally purchase a discount bond today for a price of $3333. the bond promises a cash flow of $5550 in ...
A: Price of bond = 3333 Future Value of bond = 5550 N = 5 Interest rate = 6%
Q: A solar lighting system is to be purchased and installed for 310,000. This system will save approxim...
A: PW is one of the methods of evaluating the profitability of the project. It considered the PV of cas...
Q: You are given the following financial data about an assembly machine to be implemented at a company:...
A: Given Information: Investment at Year 0 :$22000 Investment at Year 1 : $18,500 Revenues for 15 years...
Q: ABC is inclined to take a bank loan that has a face amount of P5,000,000, a term of 6 months, intere...
A: Generally, The loan is paid out off several Installments. Based on the credit history of borrower, B...
Q: PBJ Corporation issued bonds on January 1, 2006. The bonds had a coupon rate of 5.5%, with interest ...
A:
Q: Suppose the stock price is $83 and the continuously compounded annual interest rate is 7%. If the 6-...
A: Stock price or spot rate is $83 6 month forward price is $85 To Find: Forward premium
Q: Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can...
A: maximum Southern Tours should pay today to acquire Holiday Vacations = present value of future cash ...
Q: Find the present value of an investment that will have a future value of Php350,000 if it is investe...
A: Present Value: It is the current value of cash flows or an amount of money that is expected in the f...
Q: The 2-month interest rates in Switzerland and the United States are, respectively, 1% and 2% per ann...
A: In the given question it is given that Spot rate is 1.0500 and the future price is also 1.0500 hence...
Q: The furniture store offers you no-money-down on a new set of living room furniture. Further, you may...
A: To find: Present value of furniture payments
Q: You bought a car and will pay back $378 per month for 48 months. If the rate is 3.46%, how much did ...
A: The amount borrowed is calculated using the Present Value of Annuity formula.
Q: You will invest $200 per year. If the rate is 8.83%, how much will you have in 13 years?
A: Amount invested per year is $200 Rate of interest is 8.83% Time period is 13 years To Find: Future ...
Q: Which of the following events would most likely result in an appreciation of the U.S. dollar? A. Th...
A: When the value of the US dollar rises, so does its value versus foreign currencies. Dollar depreciat...
Q: The value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:
A: Future value = Present value(1 + Rate)^Time
Q: Kumba Iron Ore (Kumba) is a major supplier of iron ore to the steel industry and the company is the ...
A: The computation of the present value of net cash inflows from investment to determine investment eff...
Q: Identify the concept of an optimal capital structure for a business firm.
A: We already know that a firm needs finances to run its business. Broadly we classify these finances i...
Q: Analyse TWO (2) issues that manager would be facing when they consider changing a business firm's ca...
A: The capital structure of a firm refers to the exact mix of debt and equity used to finance its asset...
Q: A project requires an initial investment of $225,000 and is expected to generate the following net c...
A: Before investing in new projects or assets, profitability of the project is evaluated by using vario...
Q: The Janna Company is planning to purchase a new machine. The payback period will be six years. The c...
A: The payback period is the time taken by the investment to recover its cost. The payback does not con...
Q: Consider the following information: State of Economy State of Economy if State Occurs Recession Boom...
A: Expected return =Summation of Probability of state of economy×Rate of return if state occurs
Q: 19. Rachel, the chief financial officer of Sunrise Fruit Snacks, needed to determine the company’s p...
A: “Since you have asked multiple questions, we will solve the one question for you. If you want any sp...
Q: 2. Assume a fund accumulates at a force of interest given by 6 .02t. Find the effective rate of inte...
A: Force of interest (δ) = 0.02t Let the effective interest rate in second year = r For that, we need t...
Q: Amount Financed Number of Payments APR Table Factor Finance Charge Monthly Payment $600 18 17% $ $ ...
A: Borrowings are the liability of the company which is used to finance the requirement of the funds. T...
Q: An Active manager of AMF Fund has delivered the following six -monthly returns in the last 5 Years v...
A: The information ratio is widely used by fund managers, as it only sees retun and volatility. It is a...
Q: Distance, in miles 0-200 201-400 401-600 601-800 801-1000 Price per 100 Ibs $100 $120 $200 $240 $400...
A: Distance = 420 miles From the table given, Price per 100 lbs for 401-600 miles = $200
Q: A loan of Php20,000 is expected to yield a compound amount of Php45,000 at a nominal rate of 9%. Ass...
A: Loan amount (PV) = Php 20,000 Future value (FV) = Php 45000 Interest rate = 9% Semi annual interest...
Q: The future worth 5 years from now of a present cost of $280,000 at an interest rate of 1.0% per mont...
A: Present cost (PV) = $280,000 Period = 5 Years Monthly periods (n) = 5*12 = 60 Monthly interest rate ...
Q: The investor has set aside an amount of Rs 5,00,00 to be equally divided into aggressive and defensi...
A: Trigger point is 20%
Q: Perform vertical analysis of the two quotas
A: In case of vertical analysis we show each line item as a percentage of total sales. Thus vertical an...
Q: You have an opportunity to invest $102,000 now in return for $80,300 in one year and $29,400 in two ...
A: Given Information : Amount invested = $102,000 Return in first year = $80,300 Return in second year ...
Assume a hedge fund has a fee structure of 4 plus 25%. What return is the hedge fund required to generate on the managed portfolio (before fees) if it is to provide investors with a return of 15% net of fees?
Step by step
Solved in 2 steps
- If the risk-free rate of return is 2.1%, the beta of the mutual fund is 1.7, and the return of market is 5%, what is the required rate of return?A hedge fund with a 1 and 15 fee structure has a hard hurdle rate of 7.45%. If the incentive fee and management fee are calculated independently and the management fee is based on beginning-of-period asset values, an investor’s net return over a period during which the grows value of the fund has increase 19.45% is closest to A. 10.85%. B. 12.65%. C. 16.65%. D. 21.74%.The risk-free rate is currently 3.3%, and the market return is 14.8%. Assume you are considering the following investments: Investment Beta A 1.54 B 1.16 C 0.51 D 0.11 E 2.14 . a. Which investment is most risky? Least risky? b. Use the capital asset pricing model (CAPM) to find the required return on each of the investments. c. Find the security market line (SML), using your findings in part b. d. On the basis of your findings in part c, what relationship exists between risk and return? Explain.
- Security A, standard deviation = 25% beta = 1.5 Security B, standard deviation = 40% beta = 1/3 If both securities have the same return, which should I invest in? Explain using knowledge of Capital Asset Pricing Model3) The risk free rate is 3.5% The expected return of a well-diversified fund is 13% and the beta is 1.15. The expected return of the Market is 9%. Compare both investments using the M² ratio.Please help me answer this question in Excel Form 2. The risk-free rate is 4%, and the required return on the market is 12%. b. A portfolio invests 40% in the asset in (a) and the rest in a market portfolio. What is the required return on this portfolio? Thanks :)
- a. If your required rate of return is 7.60percent, what is the value of the stock for you? b. Should you make the investmentHelp me pleaseSuppose that every time a fund manager trades stock, transaction costs such as commissions and bid–ask spreads amount to .4% of the value of the trade. If the portfolio turnover rate is 50%, by how much is the total return of the portfolio reduced by trading costs?
- 8. Assume the risk-free rate is 6.7% and the expected return on the market portfolio is 7.8%. Use the capital asset pricing model (CAPM) to find the required return for each of the securities in the table here, 7. Review On Click the icon to see the Worked Solution. The required return for investment A is %. (Round to one decimal place.) The required return for investment B is %. (Round to one decimal place.) The required return for investment C is %. (Round to one decimal place.) The required return for investment D is %. (Round to one decimal place.) The required return for investment E is %. (Round to one decimal place.) 7: Data Table (Click on the icon here in order to copy its contents of the data table below into a spreadsheet.) Security Beta A 1.34 в 0.93 0.13 0.96 E 0.67Given the current risk-free rate is 9% and the market return is 12%. TI Investment Beta A 0.65 1.12 C 0.87 1.19 E 0.56 Calculate the required rate of return for each of the investments by using the Capital Asset Pricing Model (CAPM). ii. i. If you invest an equal amount in each investment, what is the portfolio beta?(a) What is CAPM and what purposes does it serve in finance in general, and in investments in particular? Discuss (b) Outline and explain the main assumptions of CAPM. What limitations do these place on its practical application? Explain (c)The risk premium of the market portfolio is 9 %, the risk free rate is 5 % and the beta estimate for AELZ is β = 1.3. What is the risk premium? What is the expected rate of return?