Asset under management of 15500, liability of 200 and NAV of 25.5 on a market va

Question

Asset under management of 15500, liability of 200 and NAV of 25.5 on a market value weighted fund. Fund as 3 stocks A priced at 25/share 300 shares
B priced at 15/share 400 shares
C priced at 10
Rate of return on fund net of operating expenses is 8% a year. Back end load fees start at 4% falls to 0%. Each year by 1%
A) how many shares in fund
B) how many shares Stock C have
C) if holding 60 shares in the first year and held until sold at end of 3 year. How much earnings and % returns during the holding period

Explanation / Answer

In a Fund,

Asset under management =15500

B). So , Sum of Value of Shares in A + B+C = Asset under management

(25x300) + (15x400) + (10xC) = 15500

C = (15500-7500-6000)/10

No. of Srock C = 200 shares

A). No. of shares in fund = 300+400+200 = 900 shares

C).

TOTAL EARNINGS = 0.94+1.3+1.62 = 3.86

%RETURN = (3.86/25.5)*100 = 15.14%

Year Opening Nav (A) Return @ 8% of A (B) A+B = C Back end load on C (D) Closing Nav (C-D = E) Earnings (E-A = F) % Returns(F/A) 1 25.5 2.04 27.54 27.54*4% = 1.10 26.44 0.94 3.69 2 26.44 2.16 28.60 28.60*3% = 0.86 27.74 1.30 4.92 3 27.74 2.22 29.96 29.96*2% = 0.60 29.36 1.62 5.84

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