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

Answer 1

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).

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

TOTAL EARNINGS = 0.94+1.3+1.62 = 3.86

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