6 Which of the following costs is excluded from the calculation of the managemen

Question

6 Which of the following costs is excluded from the calculation of the management expense ratio (MER)? a) Audit fees b) Interest charges c) Custodial fees d) Trading fees 7. An investor currently has $120,000 remaining under a withdrawal plan. He wants to retain the principle for his estate, but stil would ike some cash fows. What type of withdrawal plan would he ikely choose? a) Fixed period withdrawal plan. b) High constant dollar withdrawal plan c) Low ratio withdrawal plan. An investor purchases shares of a mutual fund with a 4% front-end load. The fund has total assets of $10,000.000 and unpaid expenses totaling $1,000,000. There are currently 1,000.000 shares outstanding What is the offering price per share of this fund? you must show your calculations) a) 3 9 000 b) $9.360 c) $ 9.375 d) $10 753 9 An investor purchased an equity fund several years ago at a total cost of $5,000 and sold t this year receiving $12.500 in total proceeds. During the holding period, the investor reinvested 54.000 in income in adsional fund units. VWhat is the investor's capital gain on this fund? tyou must show your calculations) )$1,750 b) $3,500 c) $5,500 d) $7.500 10 Which of the following types of funds is most vulnerable to liquidity risk? a) An equity fund b) A balanced fund c) A real estate fund. d) An index fund 11 Which of the following types of funds would most likely have the lowest MER? a) Bond funds b) Index funds. c) Balanced funds d) Asset allocation funds

Explanation / Answer

6 d) Trading fees is not included in management expense ratio

7 c) Low ratio withdrawal plan

8) Total assets = $ 10000000

Unpaid expenses = $ 1000000

= 10000000-1000000 = $ 9000000

= 9000+4/100*9000

= $ 9360

B is the correct option

9) Total cost = $ 5000

Selling cost = $ 12500

Reinvested amount = $ 4000

Investor capital gain = 12500-5000-4000

                              = $ 3500

B is the correct option

10 a) Equity fund is vulnerable to liquidity risk

11 a) Bond funds has lower MER

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