Umoja Unit Trust Scheme is one of the open$-$ended trust funds in Tanzania.

Explain to prospective Tanzanian investors what is an $$open$-$ended trust

fund$[5$ Marks$]$

b$)$ Suppose that an investor anticipates an $($annual$)$ income tax rate of $30\%,$ and a

$($deferred$)$ capital gains tax rate of $15\%$

Required:

What would be the final value of an investment of TZS $50$M for $5$ years under the

following scenarios?

i$)$ The investment yields an average of $3\%$ p$.$a$.$ entirely in dividends.

$[5$ Marks$]$

ii$)$ The investment yields an average of $3\%$ p$.$a$.$ entirely in price rises.

$[5$ Marks$]$

iii$)$ Explain why the two scenarios above have the same pre$-$tax rate of return,

but they yield different answers.