Assignment Questions

Q1: Give an example of three financial intermediaries and explain how they act as a bridge between small investors and large capital markets or corporations.      [2 Marks]

 

Q2: What are some comparative advantages of investing in the following?             [2 Marks]

1. Unit investment trusts.
2. Open-end mutual funds.
3. Individual stocks and bonds that you choose for yourself.

Q3: Q3: The composition of the Alhind Fund portfolio is as follows:

 

Stock			Price
A	300000		$45
B	500000		50
C	600000		30
D	800000		35

 

The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $60,000. There are 5 million shares outstanding.

What is the net asset value of the fund?

 

Q4: A U.S. Treasury bill with 90-day maturity sells at a bank discount yield of 9 percent. [4 Mark]

1. What is the price of the bill?
2. What is the 90-day holding period return of the bill?
3. What is the bond equivalent yield of the bill?
4. What is the effective annual yield of the bill?

 

Note: If using Excel, Students must provide the table of calculations.