a)The composition of the ABC Fund portfolio is as follows:

Share No. of Shares Price per share (in US$)

A 200,000 37

B 262,000 65

c 419,000 39

D 490,000 30

The fund has not borrowed and money but their accrued management fees with professional portfolio manager currently total US$ 58,000. The fund issued 2.5 million shares.

i)Determine Net Asset Value of ABC&D Fund

ii)Assume that during the year the portfolio manager sells all of the holding of share D and replaces it with 200,000 shares of E selling at $60 per share and 90,000 shares of F selling at $30 per share. Calculate the portfolio turnover rate? How is the turnover affect return to ABC Fund's investors?

b)Mutual funds are considered as well managed investment companies with fund managers actively involved in managing investments in the mutual funds. However, the additional returns may not justify additional risk. Briefly discuss the determinants of performance of mutual fund.