please please help I will rate. 18: On March 1st last year, Natalie, an investor
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please please help I will rate.
18: On March 1st last year, Natalie, an investor who is in a 48% tax bracket, buys 1,000 units of a mutual fund for $14.75/ unit in a non-registered account. Two months later she receives $1.10 per unit in capital gains distributions. Later that same year, Natalie sells the units for $19.25 a unit. Ignoring any other costs, considerations, or potential capi losses transaction. (show your calculations) on other investments, what amount would she owe in income tax as a result of this a) 816 b) $1,080 c) $1,344 d) $1,700 19. The benchmark index's performance last year was 8% with a volatility of 6%. Select the fund that is most likely being managed by a closet indexer. a) Fund A-return 12.8%,volatility 5% b) Fund B-return 7.8%, volatility 6.4% c) Fund C-return 8.1%, volatility 20% d) Fund D-return 10.3%, volatility 6% 20. It is very important to keep detailed mutual fund transaction records to ensure the ACB is calculated accurately in order to avoid: a) Inflated performance numbers b) Excessive volatility c) Inaccurate NAVPS calculations d) Double taxation 21. Which mutual fund is best suited for risk-adverse Canadian investors with time horizons 12 months. a) Canadian Asset Allocation b) US money market fund c) Canadian money market fund d) Canadian conservative bond fund 22. What is the primary investment objective of an index fund? a) To achieve above-average returns in a concentrated portfolio b) To match the performance of a specific market c) To achieve tax-advantaged income with the potential for capital gains d) To outperform the market using an active investment strategyExplanation / Answer
19) Fund D as it has volatility in line with the benchmark and returns that are also closer to the benchmark.
20) Double taxation - Mutual funds transaction should be kept in order to account for taxation and avoid double taxation.
21) Canadian money market fund would be best suited as the Canadian investor is risk-averse and has only 12 month horizon.
22) b is correct. Index fund should match the performance of a specific market.
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