Questions from General Investment

Q: An investor buys shares in a mutual fund for $20 per

An investor buys shares in a mutual fund for $20 per share. At the end of the year the fund distributes a dividend of $0.58, and after the distribution the net asset value of a share is $23.41. What w...

Q: The annual risk-free rate of return is 2 percent and

The annual risk-free rate of return is 2 percent and the investor believes that the market will rise annually at 7 percent. If a stock has a beta coefficient of 1.5 and its current dividend is $1, wha...

Q: Your broker suggests that the stock of QED is a good purchase

Your broker suggests that the stock of QED is a good purchase at $25. You do an analysis of the firm, determining that the $1.40 dividend and earnings should continue to grow indefinitely at 5 percent...

Q: What are the differences between a closed-end investment company and

What are the differences between a closed-end investment company and a mutual fund? What are the sources of return from an investment in a closed-end investment company?

Q: Why can a closed-end investment company sell for a discount

Why can a closed-end investment company sell for a discount from net asset value but a mutual fund cannot sell for a discount?

Q: What is the purpose of technical analysis, and why are those

What is the purpose of technical analysis, and why are those who use technical analysis referred to as chartists?

Q: What differentiates a real estate investment trust (REIT) from a

What differentiates a real estate investment trust (REIT) from a firm involved in building, developing, and owning properties? What differentiates a mortgage trust from an equity trust? What advantage...

Q: Using the information on the taxation of REIT distributions, what was

Using the information on the taxation of REIT distributions, what was the tax status of recent annual distributions made by Plum Creek Timber (PCU), UDR Inc. (UDR), and Washington Real Estate Investme...

Q: How do exchange-traded funds (ETFs) differ from mutual

How do exchange-traded funds (ETFs) differ from mutual funds? Why may they be considered alternatives to index mutual funds?

Q: Why does arbitrage virtually assure that an ETF will sell for its

Why does arbitrage virtually assure that an ETF will sell for its net asset value?