What is the cost impact of the short-term trading on the Japanese Equities Fund during August 1997? Identify and quantify (in basis points),various categories of costs that result from short-term trading on the fund. b) Which fund shareholders bear these costs of short-term trading?

2. a) What are the disadvantages (opportunity costs and administrative costs) of controlling "hot money" in the Japanese Equity Fund? b) Who bears these costs?

3. Assuming that action is warranted, what strategy will you propose to the Japanese Equities Fund directors that is likely to reduce substantially the short-term purchases and redemptions (or their impact) by shareholders while minimizing the disadvantages identified above? (Be specific and quantify your recommendation.) Alternatives may include: a. Restricting the number of transactions per account b. Restricting the manner in which redemption orders are taken c. Adding a redemption fee to the fund d. Adding a back-end load to the fund

4. a) How is it possible for investors to "game" the fund's pricing policy? b) Explain when an investor could make extra profits by market timing the Japanese Equities Fund.

5. a) What security prices does the Japanese Equities Fund normally use at 4 p.m. ET when the Net Asset Value (NAV) is determined? b) What alternative prices could be used? c) What other valuation time could be used?