Download Lesson 13 key - Bakersfield College

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Personal Finance
Name:________________
Lesson 13
Chapter 16
FINANCIAL PLANNING PROBLEMS
2. Calculating Net Asset Value. Given the information below, calculate the net asset value for the New Empire
small-cap mutual fund.
Total assets
Total liabilities
Total number of shares
$350,000,000
10,000,000
17,000,000
Net asset value =
Net asset value =
8. Finding Total Return. Assume that one year ago you bought 100 shares of a mutual fund for $15 per
share, you received $0.75 per share distribution during the past 12 months, and that the market value of
the fund is now $18. Calculate the total return for this investment if you were to sell it now.
Bus 40
Personal Finance
Name:________________
Lesson 13
Chapter 16 Case
The Wrong Mutual Fund? (p. 552)
1. Often investors indicate that diversification and professional management are the two main reasons why they
choose mutual fund investments. How important do you consider these two factors? Why?
2. At the time of publication, Fidelity sold over 100 mutual funds ranging all the way from very conservative to
very speculative investments. Why do you think that a fund family would offer this many investment
alternatives.
3. According to the Hansons, everybody was investing in mutual funds—indeed, it almost seemed fashionable to
invest in mutual funds. In your own words, what did Mike and Della Hanson do wrong?
4. Obtain information about the Fidelity Select Gold fund and one other Fidelity fund at the library or via the
Internet. Then complete a mutual fund evaluation form (see the “Financial Planning Calculations” box on
page 545) for each fund and answer the questions below.
a. What sources of information did you use to evaluate each fund?
b. What fees must investors pay to invest in each fund?
c. What is the investment objective for each fund?
d. How would you describe the fund’s financial performance over the past 12 months? Past five years? Past
ten years?
e. How would you rate the risk associated with each fund?
f.
Would you invest your money in either of these funds? Justify your answer.