Question
Kassie invested in four (4) different mutual funds in her TFSA portfolio at the start of the year and is looking to sell a portion
Kassie invested in four (4) different mutual funds in her TFSA portfolio at the start of the year and is looking to sell a portion of those investments today to buy a car. She has invested $8,000 into each of the mutual funds. The financial details of the mutual funds are as follows: (30 points)
Mutual Fund 1 Purchase NAVPS - $40/unit Current NAVPS - $42/unit Paid $1.00/unit dividend 5% front-end load No back-end load
| Mutual Fund 2 Purchase NAVPS - $37/unit Current NAVPS - $32/unit No dividend paid 3% front-end load 5% back-end load if withdrawal is within first two years of purchase
|
Mutual Fund 3 Purchase NAVPS - $42/unit Current NAVPS - $50/unit Paid $1.25/unit dividend No front-end load No back-end load | Mutual Fund 4 Purchase NAVPS - $45/unit Current NAVPS - $35/unit Paid $1.75/unit dividend 8% front-end load 2% back-end load if withdrawal is within first five years of purchase |
Kassie has come to you for some financial advice about the value of her mutual funds and for your opinion on the best withdrawal options. Please advise Kassie on the following:
What is Kassies total investment in her TFSA portfolio? (1 point)
Calculate how many units of each mutual fund she purchased (each mutual fund allows for partial units) (8 points)
Calculate the amount of earnings she would receive if she sold all her units in each mutual fund today. (12 points)
Based on your calculations, which mutual funds should she withdraw money from if she needed $15,000 to purchase the car? (1 point)
If Kassie purchased $8,000 per year for two (2) more years into Mutual Fund 1 at $43/unit and $45/unit, respectively, how many units of Mutual Fund 1 would she own? (4 points)
If Mutual Fund 1 paid $1.50/unit in dividends in Year 2 and $2.00/unit in dividends in Year 3, how much in dividends would she have earned in the three years of owning the mutual fund? (4 points)
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