Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION ONE [ 2 0 Marks ] a ) Briefly differentiate between Retail investors and Institutional Investors, with five ( 5 ) points. [ 1

QUESTION ONE
[20 Marks]
a) Briefly differentiate between Retail investors and Institutional Investors, with five (5) points.
[10 Marks]
b) Financial planning is an important aspect for any investor before undertaking an investment decision. Bricfly discuss the steps involved in financial planning.
[5 Marks]
c) Briefly discuss, with five (5) points, the advantages and disadvantages of Institutional Investors to an economy.
[5 Marks]
QUESTION TWO
[20 Marks]
a) Briefly discuss, with four (4) points, the importance of Mutual Funds to a country's economy.
[8 Marks]
b) Mr. Semiono is considering an investment of 1ZS25,600,000 in a mutual fund for the purpose of adding to your retirement income. You expect to retire 35 years from now. You are choosing between Wekeza Maisha Fund and Jikimu Fund, which are operated by UTT AMIS. Wekeza Misha Fund has no initial charge, an annual management charge of 0.7% of the value of the Fund an average annual share dealing costs of 0.4% and pays annual tax at the rate of 20%.
Jikimu Fund fund has an initial charge of 4% of the investment, an annual management charge of 1.5% of the value of the Fund, an average annual share dealing costs of 0.8% and pays deferred tax at the rate of 10%.
You have read that over the long term, the average real rate of retum on a balanced portfolio of shares has been 8% p.a. You expect that performance to continue for the next 35 years. On the assumption that the funds match the general market performance:
Required
a) What will be the value of Wekeza Maisha Fund after 35 years?
[4 Marks]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

11th Edition

1259277178, 978-1259277177

More Books

Students also viewed these Finance questions

Question

Appreciate the legal implications of employment documentation

Answered: 1 week ago