Respuesta :
Answer:
Task 1:
The answer is $700.
Task 2:
The answer is $130.
Task 3:
The answer is $20.
Task 4:
The answer is $10,570.
Task 5:
The answer is $110.
Explanation:
Task 1:
How much does each investor make on his investment with the 7% rate of return?
Solution:
Adrian & Clemens makes [$10,000*0.07] on their investment = $700.
Task 2:
How much does Adrian pay in fees for his actively managed mutual fund?
Solution:
Adrian owes to his broker = (10000*.013) = $130
Task 3:
How much does Clemens pay in fees for the index fund?
Solution:
Clemens owes to his broker= ($10000*.002) = $20
Task 4:
At the end of the year, what's the total value (AFTER FEES) of Adrian's mutual fund?
Solution:
Value of Adrian's stock = $10000+$570 (net of brokerage) = $10,570
Task 5:
What's the total value (AFTER FEES) of Clemens's index fund?
Solution:
Value of clemens' stock = $10000+$680 (net of brokerage) = $10,680
Task 6:
How much more value does Clemens' investment generate than Adrian's in one year's time?
Solution:
Clemens investment makes ($680-$570) than adrian's investment = $110
1. The amount each investor make on the investment is $700.
2 The amount paid in fees should be $130.
3. The amount paid in fees for the index fund is $20
4. The total value after fees should be $10,570
5. The total value after fees should be $10,680
6. The more value should be $110.
Calculation of the amount of each part:
1. The amount that each investor make should be
= 7% of $10,000
= $700
2. The amount paid in fees should be
= 1.3% of $10,000
= $130
3. The amount paid in fees for the index fund is
= 0.2% of $10,000
= $20
4. The total value after fees should be
= $10,000 + $570
= $10,570
5. The total value after fees should be
= $10,000 + $680
= $10,680
6. The more value should be
= $680 - $570
= $110
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