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Homework answers / question archive / 1)Superannuation funds that aim at delivering a longer-term income stream and capital appreciation by acquiring a diversified asset portfolio across a wider risk spectrum are classified as: Select one: O a

1)Superannuation funds that aim at delivering a longer-term income stream and capital appreciation by acquiring a diversified asset portfolio across a wider risk spectrum are classified as: Select one: O a

Finance

1)Superannuation funds that aim at delivering a longer-term income stream and capital appreciation by acquiring a diversified asset portfolio across a wider risk spectrum are classified as: Select one: O a. managed growth funds. O b. capital stable funds. O C. capital guaranteed funds. O d. balanced growth funds.

2)Solve for the unknown interest rate in each of the following (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.): Present Value Years Interest Rate Future Value $ 210 5 % $ 270 330 19 997 36,000 20 175,751 35,261 30 764,676.

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1.

The objective of a Managed Growth Fund is to provide capital growth whilst being managed so as to remain,over a market cycle.Typically, the Fund is likely to have greater exposure to underlying equities and commodities, and less exposure to underlying cash, fixed interest and property assets, than other funds in the range.These are not well diversified.

Capital Stable Fund invests across a range of asset classes but with a significant portion in defensive assets such as fixed interest investments and cash and a small portion in growth assets such as shares and property. It aims to provide a moderate level of income with some capital growth.

Capital guarantee fund is an investment in which the investor's principal is shielded from any losse by the fund company.These tend to be long-term and illiquid due to the way they are structured,

The Balanced Growth Fund contains a stock component, a bond component, and sometimes a money market component in a single portfolio.These are well diversified across a wider risk spectrum with their objective somewhere between growth and income.

Thus keeping all the reuirements of the Supperannuation fund,it fits best under the Balanced Growth Fund category.

2.

When interest is applied, the future value can be calculated as under

Future value = Present value *(1+interest rate)^time period

The above formula is applicable when compound interest is applied.

Thus, solving, we get as under:

270= 210*(1+interest rate)^5

Thus, interest rate = (270/210)^(1/5) -1 = 0.0515475. Thus, interest rate = 5.15%.

Second, 997 = 330*(1+interest rate)^19

Interest rate = (997/330)^(1/19) -1 = 0.05991904. thus, interest rate = 5.99%.

Third, 175,751 = 36000*(1+interest rate)^20

Thus, interest rate = (175,751/36000)^(1/20) -1 = 0.08250464 or, 8.25%

Fourth, 764,676 = 35261*(1+interest rate)^30

Interest rate = (764,676/35,261)^(1/30) -1 = 0.107999 or 10.80%

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