Department of Finance Olin Business School Washington University in St Louis Spring 2022 FIN 441 Investments Textbook Assignment 3 Due Feb 9th 2022 1 Bodie Kane Marcus 2021 Chapter 4 Problem 2 What are some comparative advantages of investing in the following a Unit investment trusts b Open end mutual funds c Individual stocks and bonds that you choose for yourself 2 Bodie Kane Marcus 2021 Chapter 4 Problem 9 The composition of the Fingroup Fund portfolio is as follows Stock A B C D The fund has not borrowed any funds but its accrued management fee with the portfolio manager currently totals 30 000 There are 4 million shares outstanding What is the net asset value of the fund Shares 200 000 300 000 400 000 600 000 Price 35 40 20 25 3 Bodie Kane Marcus 2021 Chapter 4 Problem 9 Reconsider the Fingroup Fund in the previous problem If during the year the portfolio manager sells all of the holdings of stock D and replaces it with 200 000 shares of stock E at 50 per share and 200 000 shares of stock F at 25 per share what is the portfolio turnover rate 4 Bodie Kane Marcus 2021 Chapter 5 Problem 3 The Narnian stock market had a rate of return of 45 last year but the inflation rate was 30 What was the real rate of return to Narnian investors 5 Bodie Kane Marcus 2021 Chapter 5 Problem 12 Visit Professor Kenneth French s data library Web site Kenneth French s data and download the monthly returns of 6 portfolios formed on size and book to market 2 3 Choose the value weighted series for the period from January 1930 December 2018 Split the sample in half and compute the average SD sharpe ration skew and kurtosis for each of the six portfolios for the two halves Do the six split halves statistics suggest to you that returns come from the same distribution over the entire period