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Various Financial Questions

1) What is the asset value of an investment company with $10,000,000 in assets, $790,000 in current liabilities, and 1,200,000 shares outstanding?
2) If a mutual fund's net asset value is $23.40 and the fund sells its shares for $25, what is the load fee as a percentage of the net asset value?
3) If an investor buys shares in a no-load mutual fund for $31.40 and the shares appreciate to $44.60 in a year, what would be the percentage return on the investment? If the fund charges an exit fee of 1 percent, what would be the return on the investment?
4) An investor buys shares in a mutual fund for $20 per share. At the end of the year the fund distributes a dividend of $0.58, and after the distribution the net asset value of a share is $23.41. What would be the investor's percentage return on the investment?

5) What are the three forms of the efficient market hypothesis? What are possible exceptions (anomalies) to the efficient market hypothesis?

6) a) An individual in the 28% federal income tax bracket and 15% long-term capital gains tax bracket bought and sold the following securities during the year:

Cost Basis of Stock Proceeds of Sale
ABC $25,500 $28,600 DEF $35,400 $31,000 GHI $31,000 $36,000 What are the taxes owed on the short-term capital gains?
* Taxes owed are $1,316 on $4,700 worth of short term capital gains.

b) An individual in the 35% federal income tax bracket and 15% long-term capital gains tax bracket bought and sold the following securities during the year:
Cost Basis of Stock Proceeds of Sale
ABC $34,600 $28,600 DEF $29,400 $31,000 GHI $21,500 $19,000 What are the taxes owed or saved as a result of these sales?

7) You are in the 25% income tax bracket. What are the taxes owed or saved if you
a) contribute $2,000 to a 401(k) plan
b) contribute $2,000 to a Roth IRA
c) withdraw $2,000 from a traditional IRA
d) withdraw $2,000 from a Keogh account

Solution Preview

1. Net Asset value = $10,000,000 - $790,000 = $ 9,210,000

2. Percentage = (25-23.40) / 23.40 x 100% = 6.84%

3. Percentage = (44.60-31.40)/31.40 x 100% = 42.04%
If the fund charges an exit fee of 1 percent, percentage=(44.60-44.60*1%-31.40)/31.40 x 100% = 40.62%

4. ROI = ($24.31 ...

Solution Summary

The solution gives detailed steps on solving various questions on the topic of finance such as asset, tax rate, return rate and mutual fund. All formula and calculations are shown.

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