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]
Unit investment trusts.
Open-end mutual funds.
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]
What is the price of the bill?
What is the 90-day holding period return of the bill?
What is the bond equivalent yield of the bill?
What is the effective annual yield of the bill?
Note: If using Excel, Students must provide the table of calculations.
