1)Assume that you have invested $500,000 to purchase shares in a hedge fund reporting $800
million in assets, $100 million in liabilities, and 70 million shares outstanding. Your initial lockout
period is 3 years. If the share price after 3 years increases to $15.28, what is your annualized
return over the 3-year holding period?
2)Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million
shares at the start of the year and with $500 million in assets, 40 million in debt, and 18 million
shares at the end of the year. During the year investors have received income distributions of
$.50 per share and capital gain distributions of $.30 per share. If the total expense ratio is .75%,
what is the rate of return on the fund?
(D) The answer cannot be determined from the information given
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