2. Unit Trusts are a form of collective investment that allows investors with similar investment objectives to pool their funds to be invested in a portfolio of securities or other assets. The return on investment of unit holders is usually in the form of income distribution and capital appreciation, derived from the pool of assets supporting the unit trust fund. Each unit earns an equal return, determined by the level of distribution and/or capital appreciation in any one period. You are required to find solution for the scenarios given below. a. b. A mutual fund charges a 5 percent upfront load plus reports an expense ratio of 1.34 percent. If an investor plans on holding a fund for 30 years, what is the average annual fee, as a percent, paid by the investor? . (4 marks) A mutual fund offers "A" shares which have a 5% upfront load and an expense ratio of 0.76%. The fund also offers "B" shares which have a 3% backend load and an expense ratio of 0.87%. Which shares make more sense for an investor looking over an 18 year horizon? (4 marks) C. On January 1st, a mutual fund has the following assets and prices at 4:00 p.m. Stock Shares owned Price (RM) 1 1,000 2.03 2 5,000 51.37 3 2,800 29.08 4 10,000 67.19 Page 4 of 9 BFP3103 INVESTMENT PLANNING AND ANALYSIS / FE / S01 5 3,000 4.42 cash n.a. 2,408 (3 marks) d. Compute the return of portfolio investment in Malaysian Ringgit (MYR) for a portfolio's market values which at the beginning and end of the evaluation were USD 100 million and USD 280 million, respectively, and during the evaluation period USD10 million cash distribution as dividend was distributed to the client. (3 marks) (Total: 14 marks) 2. Unit Trusts are a form of collective investment that allows investors with similar investment objectives to pool their funds to be invested in a portfolio of securities or other assets. The return on investment of unit holders is usually in the form of income distribution and capital appreciation, derived from the pool of assets supporting the unit trust fund. Each unit earns an equal return, determined by the level of distribution and/or capital appreciation in any one period. You are required to find solution for the scenarios given below. a. b. A mutual fund charges a 5 percent upfront load plus reports an expense ratio of 1.34 percent. If an investor plans on holding a fund for 30 years, what is the average annual fee, as a percent, paid by the investor? . (4 marks) A mutual fund offers "A" shares which have a 5% upfront load and an expense ratio of 0.76%. The fund also offers "B" shares which have a 3% backend load and an expense ratio of 0.87%. Which shares make more sense for an investor looking over an 18 year horizon? (4 marks) C. On January 1st, a mutual fund has the following assets and prices at 4:00 p.m. Stock Shares owned Price (RM) 1 1,000 2.03 2 5,000 51.37 3 2,800 29.08 4 10,000 67.19 Page 4 of 9 BFP3103 INVESTMENT PLANNING AND ANALYSIS / FE / S01 5 3,000 4.42 cash n.a. 2,408 (3 marks) d. Compute the return of portfolio investment in Malaysian Ringgit (MYR) for a portfolio's market values which at the beginning and end of the evaluation were USD 100 million and USD 280 million, respectively, and during the evaluation period USD10 million cash distribution as dividend was distributed to the client. (3 marks) (Total: 14 marks)