Suppose the One-Year T-Bill Rate Was 5% on 1/1/2007,4% on 1/1/2008,and

question 31

Essay

Suppose the one-year T-bill rate was 5% on 1/1/2007,4% on 1/1/2008,and 6% on 1/1/2009.The GDP deflator (2004 = 100)was 110 on 1/1/2007,112 on 1/1/2008,114 on 1/1/2009,and 120 on 1/1/2010.The tax rate on interest income is 30%.
(a)Calculate the after-tax nominal rate of return for 2007,2008,and 2009.
(b)If you began with $1000 on 1/1/2007 and invested in T-bills each year (paying taxes at the end of each year),how much would you have in nominal terms on 1/1/2010? How much would you have in real terms (2004 dollars)?
(c)How much was your nominal after-tax interest earned in part (b)over the three years? How much did you earn in real (2004)after-tax dollars?

Comprehend the diversity and purpose of mutual fund types, including money market, bond, stock, and hybrid funds.

Understand the investment strategies and risks associated with REITs.

Calculate the return on investment for mutual funds considering distributions and changes in NAV.

Identify the regulatory and operational features unique to mutual funds, including load structures and 12b-1 fees.

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Definitions:

Comarketing

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Personal Determinants

Individual characteristics such as personality, attitudes, values, and behaviors that influence one's decisions and actions in various situations.

Cultural Experiences

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Needs and Motives

The psychological or physical deficiencies that prompt individuals to act in a certain way or pursue particular goals to satisfy those deficiencies.