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Problem Set 7
1. Calculating Net Asset Value. Given the information below, calculate the net asset value for the Boston Equity mutual fund.
Total assets $ 225,000,000 Total liabilities 5,000,000 Total number of shares 4,400,000
2. Calculating the Rate of Return of Investment Using Financial Leverage. Suppose Shaan invested just $ 10,000 of his own money and had a $ 90,000 mortgage with an interest rate of 8.5 percent. If after three years he sold the property for $ 120,000.
a. What is his gross profit? b. What is his net profit / loss? c. What is the rate of return on investment?
3. Shelly’ s assets include money in the checking and savings accounts, investments in stocks and mutual funds, personal property, such as furniture, appliances, an automobile, coin collection and jewelry. Shelly calculates that her total assets are $ 108,800. Her current unpaid bills, including an auto loan, credit card balances, and taxes total $ 16,300.