This is a course on Investments. I need help, with good thorough work. Well explained and detailed, done on time as well. Thanks!

Econ 1710 Investments I Fall 2016 - KUO Homework #3: Chapters 4 and 5 Homework is due on Monday, September 26, handed in at either the START or the END of class, and may be handed in the following Wed class graded on a basis of half credit. As stated on the syllabus, homework is graded on completion and good faith effort, determined at my discretion. CHAPTER 4 Q1) Suppose that you would like to invest in a broad-based market index (a way to implement the \"optimal portfolio\" from Chapter 7) like the Wilshire 5000, so you are thinking about whether it makes sense to invest in the ETF or the index mutual fund. 1a) Describe the Wilshire 5000 index - what assets comprise this index, how is it calculated (price-weighted, value-weighted, etc). You may want to research what it is further online rather than just searching through the textbook (in Chapter 2). For your own reference, you may want to compare the Wilshire with other major market indices such as the S&P 500, Russell 2000, NASDAQ 100 and the Dow to understand what each captures since they often represent common index fund options (or funds are described relative to these indices - see Figure 4.5 graph of Wells Fargo fund performance). 1b) You decide to look at the broad-based market index securities sold by Vanguard. The Vanguard US total market index ETF (symbol VTI) currently quotes an expense ratio of 0.05%, while its counterpart index fund (symbol VTSMX) has an expense ratio of 0.16%. Currently, the commission for your brokerage account is $12.99 per trade. Suppose you plan investing your money for only 1 year and you have saved $10,026 in total ($10,000 to invest + trading costs). (i) Demonstrate which option is the most appropriate for you, assuming that the index remains stable over the year. (Hint: Remember that you need to sell your investment as well as buy it.) (ii) What is the breakeven amount of money (with a one-time purchase and one-time sell after a 1 year holding period) that you need to invest in order to be indifferent between the two options? Show your work but don't get bogged down in the precise details; get a back-of-the-envelope calculation that you might do if you were actually making this decision (iii) How would your answer change if you were planning on holding this investment indefinitely (with no plans to sell)? (iv) Which option would be more appropriate if you increased your holding period to 5 years and why? To make your math easier, assume that value of the index does not change over time. Now, conceptually, how might the balance change if the Wilshire did grow (consistently) over the 5 year period as we would hope? Q2) A closed-ended fund begins the year with a net asset value of $12.00. By year-end, NAV equals $13.00. At the start of the year, the fund was selling at a 3% premium to NAV. By the end of the year, the fund was selling at a 5% discount to NAV. The fund paid year-end distributions of income and capital gains of $1.12. 2a) What is the rate of return to an investor in the fund during the year? 2b) Suppose instead that an investor held the same securities that comprised the closedended fund (but outside of the fund). What would the investor's rate of return have been? How does that compare to the return of an investor who participated in the fund? Q3) Money Magazine reports on its top 50 mutual fund picks for the year (the Money 50). The highest performer in 2015 is the T Rowe Price Blue Chip Growth (TRBCX) with 1-year return of 13.1%. [http://time.com/money/4157193/money-50-best-mutual-funds-etfs-2016/] 3a) Do you expect that it continued to be a top-performer in next year? Why or why not? (Think about what studies of mutual funds seem to suggest.) 3b) Suppose instead that the fund was one of the worst performers in its comparison group (i.e. \"Large Cap\"). Would you be more or less likely to believe its relative performance will persist into the following year? Why? Q4) Let's consider the implications of different fee structures and how they can erode yearly returns. The Hartford Healthcare Fund Class A (ticker: HGHAX) reported average annual 5 year returns of 20.04% but it charges a front-end load of 5.25% (for investments