13. Calculating Fees (LO2, CFA2) You purchased 2,000 shares in the New Pacific Growth Fund on January 2, 2019, at an offering price of $47.10 per share. The front-end load for this fund is 5 percent, and the hackend load for redemptions within one year is 2 percent. The underlying assets in this mutual fund appreciate (including reinvested dividends) by 8 percent during 2019, and you sell back your shares at the end of the year. If the operating expense ratio for the New Pacific Growth Fund is 195 percent, what is your total retorn from this investment? (Assume th the operating expense is need ainst the funds return.) What do you conclude about the impact of fees in evaluating mutual fund performance? Instienpt to talk Ms. Hartan out of investing in a fund of funds, Mr. Phillips addressed the advantages of investing in individual funds. Which of the following would be his most compelling argument ..The lower expenses of individual funds b. The likelihood of style drift in a fund of funds The lack or a benchmark for a fund of funds 2. What mvestment approach would be consistent with Ms. Harlan's toterance for risk? Distressed security Arbitrage Market neutral 3. Which of Ms. Hart's responses is most likely to make Mr. Phillips consider her a bud candidate for investing in hepe fundit a. I pay a lot of attention to expense and return data from my investments and track their performance closely bi gay several million dollars in taxes every year, and I want any additional investments to be tnx-friendly I'm interested in high return. I'm not afraid of tisk, and I'm investing money for the benefit of my heirs. 4. If Ms Hattan is truly concerned about benchmarks, she should sold which of her suggested investments? None of the 1. Kelly Tool and Die c. Hedge funds ICFA3, CFASI Suzanne Harlan has a large, well-diversified stock and hond portfolio She wants to try some alternative investments, such as hedge funds and has contacted Lawrence Phillips, CFA, to help assemble a new portfolio Before agreeing to make recommendations for Ms. Hartan, Mr Phillips wants to determine if she is wood candidate for alternative investments. He gives her a standard questionnaire. Here are some of her comments I'm interested in high returns. I'm not afraid of risk and I'm investing money for the benefit of my beirs. n local attention to expense und return data from my investments and track their performance closely Investors have told me that assessing the quality of hedge funds is difficult, so I'm interested purchasing a fund of funds where I can diversify my risk while potentially sharing in some Outsized returne pay several million dollar in taxes every year, and I want any additional Investments to be tax-friendly My neighbors founded Kelly Tool and Die 20 years ago. They are declaring bankruptcy, and I am interested in obtaining a partial interest in the business Ms Harlan then tells Mr. Phillips that it is imperative that the returns of any investments he recommende must be in some way comparable to a benchmark Mr. Phillips is not excited about the business idea or the land of funds. However, he does know or several managers of individual hedge funds. He talks her out of a fund of funds and tests she put her money in the Stillman Fund, which concentrates on spin-offs, Denerally buying the sun-off company and shorting the parent company . I pay 13. Calculating Fees (LO2, CFA2) You purchased 2,000 shares in the New Pacific Growth Fund on January 2, 2019, at an offering price of $47.10 per share. The front-end load for this fund is 5 percent, and the hackend load for redemptions within one year is 2 percent. The underlying assets in this mutual fund appreciate (including reinvested dividends) by 8 percent during 2019, and you sell back your shares at the end of the year. If the operating expense ratio for the New Pacific Growth Fund is 195 percent, what is your total retorn from this investment? (Assume th the operating expense is need ainst the funds return.) What do you conclude about the impact of fees in evaluating mutual fund performance? Instienpt to talk Ms. Hartan out of investing in a fund of funds, Mr. Phillips addressed the advantages of investing in individual funds. Which of the following would be his most compelling argument ..The lower expenses of individual funds b. The likelihood of style drift in a fund of funds The lack or a benchmark for a fund of funds 2. What mvestment approach would be consistent with Ms. Harlan's toterance for risk? Distressed security Arbitrage Market neutral 3. Which of Ms. Hart's responses is most likely to make Mr. Phillips consider her a bud candidate for investing in hepe fundit a. I pay a lot of attention to expense and return data from my investments and track their performance closely bi gay several million dollars in taxes every year, and I want any additional investments to be tnx-friendly I'm interested in high return. I'm not afraid of tisk, and I'm investing money for the benefit of my heirs. 4. If Ms Hattan is truly concerned about benchmarks, she should sold which of her suggested investments? None of the 1. Kelly Tool and Die c. Hedge funds ICFA3, CFASI Suzanne Harlan has a large, well-diversified stock and hond portfolio She wants to try some alternative investments, such as hedge funds and has contacted Lawrence Phillips, CFA, to help assemble a new portfolio Before agreeing to make recommendations for Ms. Hartan, Mr Phillips wants to determine if she is wood candidate for alternative investments. He gives her a standard questionnaire. Here are some of her comments I'm interested in high returns. I'm not afraid of risk and I'm investing money for the benefit of my beirs. n local attention to expense und return data from my investments and track their performance closely Investors have told me that assessing the quality of hedge funds is difficult, so I'm interested purchasing a fund of funds where I can diversify my risk while potentially sharing in some Outsized returne pay several million dollar in taxes every year, and I want any additional Investments to be tax-friendly My neighbors founded Kelly Tool and Die 20 years ago. They are declaring bankruptcy, and I am interested in obtaining a partial interest in the business Ms Harlan then tells Mr. Phillips that it is imperative that the returns of any investments he recommende must be in some way comparable to a benchmark Mr. Phillips is not excited about the business idea or the land of funds. However, he does know or several managers of individual hedge funds. He talks her out of a fund of funds and tests she put her money in the Stillman Fund, which concentrates on spin-offs, Denerally buying the sun-off company and shorting the parent company . I pay