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    07 Task Performance 1 - Finmar

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    Jen Deloy
    This document contains the answers to multiple choice questions, calculations of net asset value (NAV) and units of participation for two investment funds, and an analysis of the most appropriate investments for three investors with different risk profiles and objectives. It recommends direct investments for full control, mutual funds for diversification and reduced risk, and equity funds for risk-averse individual investors.

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    07 Task Performance 1 - Finmar

    Uploaded by

    Jen Deloy
    682 views2 pages
    This document contains the answers to multiple choice questions, calculations of net asset value (NAV) and units of participation for two investment funds, and an analysis of the most appropriate investments for three investors with different risk profiles and objectives. It recommends direct investments for full control, mutual funds for diversification and reduced risk, and equity funds for risk-averse individual investors.

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    07 TASK PERFORMANCE 1_ FINMAR

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    This document contains the answers to multiple choice questions, calculations of net asset value (NAV) and units of participation for two investment funds, and an analysis of the most appropriate investments for three investors with different risk profiles and objectives. It recommends direct investments for full control, mutual funds for diversification and reduced risk, and equity funds for risk-averse individual investors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    682 views2 pages

    07 Task Performance 1 - Finmar

    Uploaded by

    Jen Deloy
    This document contains the answers to multiple choice questions, calculations of net asset value (NAV) and units of participation for two investment funds, and an analysis of the most appropriate investments for three investors with different risk profiles and objectives. It recommends direct investments for full control, mutual funds for diversification and reduced risk, and equity funds for risk-averse individual investors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Deloy, Jenivieve O.

    BSA501
    FINANCIAL MARKET
    07 TASK PERFORMANCE 1

    I. MULTIPLE CHOICE
    1. B
    2. C
    3. D
    4. A
    5. D
    6. A
    7. B
    8. D
    9. C
    10. D
    II. PROBLEM SOLVING
    1.
    Total market value of shares today (450000000 x 95%) 427,500,000.00
    Add: Dividends received 12,000,000.00
    Less: Expenses (427500000 x 1.5%) 6,412,500.00
    Market value of the fund (NAV) 433,087,500.00

    𝑁𝑒𝑡 𝑎𝑠𝑠𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒(𝑁𝐴𝑉𝑝𝑈)


    = 𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑢𝑛𝑑 − 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑢𝑛𝑖𝑡𝑠
    = 433,087,500.00 − 3,000,000
    = 144.36 per unit

    𝑈𝑛𝑖𝑡𝑠 𝑜𝑓 𝑝𝑎𝑟𝑡𝑖𝑐𝑖𝑝𝑎𝑡𝑖𝑜𝑛 = 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 − 𝑁𝐴𝑉𝑝𝑈


    = 500,000 − 144.36 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡
    = 𝟑,𝟒𝟔𝟑.𝟓𝟎 𝒖𝒏𝒊𝒕𝒔

    2.
    Total market value of shares today (650000000 x 105%) 682,500,000.00
    Add: Dividends received 6,000,000.00
    Less: Expenses (682500000 x 3%) 20,475,000.00
    The market value of the fund (NAV) 668,025,000.00

    𝑁𝑒𝑡 𝑎𝑠𝑠𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒(𝑁𝐴𝑉𝑝𝑈) = 𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑢𝑛𝑑 − 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠𝑎ℎ𝑟𝑒𝑠

    = 668,025,000.00 − 8,000,000

    = 𝑷𝟖𝟑.𝟓𝟎 𝐩𝐞𝐫 𝐬𝐡𝐚𝐫𝐞


    III. CASE ANALYSIS
    1.
     One of her objectives is to have control of the asset therefore, she must choose direct
    investments. In direct investment, Arya will have a better control of her asset since direct
    investments can be applied in a single asset or a portfolio of assets where she will be able to
    have a greater control in decision making and can choose the asset according to the criteria with
    full transparency.

    2.

     Snow Corporation wanted to have diversified investments to reduce risk, they must choose
    indirect investments, since they also plan to seek a third party which is duly regulated by the SEC
    to manage the investment Snow Corporation should choose Mutual Funds(MF) regarding it. In
    Mutual Funds, the fund managers on behalf the investors, invest funds in a diversified portfolio
    of stocks, bonds, money market instruments or even other mutual funds and it is also traded in
    Philippine Stock Exchange.

    3.

     Tyrion is an individual investor, since he is a risk-averse he should invest in indirect


    investments and the most appropriate investment for him is equity funds. The attributes that
    make equity funds most suitable for small individual investors are the reduction of risk
    resulting from a fund's portfolio diversification and the relatively small amount of capital
    required to acquire shares of an equity fund.

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