Financial Markets and Institutions (2-downloads)

7. What is a load fund?

8. How are deferred loads usually structured?

9. What distinguishes a hedge fund from other types of

mutual funds?

10. What prompted the growth of money market

mutual funds?

11. What do 12b-1 fees pay, and what is the maximum

amount these fees can be?

12. What is the primary source of the conflict of interest

between shareholders and investment managers?

13. What is late trading

when referred to by

mutual funds?

14. What is market timing when referred to by

mutual funds?

15. What regulatory changes have been adopted or are

being considered to deal with abuses in the mutual

fund industry?

Q U A N T I TAT I V E   P R O B L E M S

1. On January 1, the shares and prices for a mutual fund

at 4:00 

PM

are as follows:

4. A mutual fund reported year-end total assets of

$1,508 million and an expense ratio of 0.90%. What

total fees is the fund charging each year?

5. A $1 million fund is charging a back-end load of 1%,

12b-1 fees of 1%, and an expense ratio of 1.9%. Prior

to deducting expenses, what must the fund value be

at the end of the year for investors to break even?

Questions 6–12 trace a sequence of transactions involving

a single mutual fund.

6. On January 1, a mutual fund has the following assets

and prices at 4:00 

PM

.