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  3. 1. you invest $12,500 in fund vsml at the start of

1. You invest $12,500 in Fund VSML at the start of the year. The fund...

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Finance

1. You invest $12,500 in Fund VSML at the start of the year. The fund has a front-end load of 3% and an annual expense fee of 2.25% of the ending asset value at year end. You expect the fund to have a gross rate of return of 8% this year. With your investment, what is your expected value in one year?

A. $12,125.20 B. $13,095.00 C. $12,654.80 D. $12,800.36 E. $13,162.50

2. Hedge funds are ______ transparent than mutual funds because of ______ strict SEC regulation on hedge funds compared to mutual funds.

A. more; more B. more; less C. less; less D. less; more E. none of the above can be stated for certain

3. Hedge funds charge both expense fees and performance fees. The average performance fee on hedge funds in recent years has been ____________.

A. 5% B. 10% C. 15% D. 20% E. 25%

4. Hedge funds are permitted to invest in or engage in

A. distressed firms B. convertible bonds C. currency speculation D. merger arbitrage E. all of the above

5. The risk profile of hedge funds ______, making performance evaluation ______.

A. can shift rapidly and substantially; challenging B. can shift rapidly and substantially; straightforward C. is stable; challenging D. is stable; straightforward E. none of the above

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