Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Assume a typical index fund or ETF charges a management fee of 0.10% per year and has low turnover resulting in trading costs of another 0.05% per year. Assume that an actively managed stock mutual fund charges a management fee of 1.0% and has much higher turnover resulting in trading costs of an additional 0.5% per year. The actively managed fund has a chance to outperform the market while the index fund will deliver the return of the market (less management and trading costs). What excess return per year must the actively managed fund earn to overcome the higher fees?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939501

Have any Question? 


Related Questions in Basic Finance

We covered many important topics during this class

We covered many important topics during this class. Understanding spending and income, cutting expenses, saving and investing money, building an emergency fund, improving credit, getting out of debt, protecting your asse ...

Suppose walmart is allowed to open a bank that accepts

Suppose Walmart is allowed to open a bank that accepts deposits and makes loans at its U.S. stores. a. How might this affect existing banks, especially community banks? b. In general, who might gain and who might lose if ...

Suppose the policy interest rate controlled by the central

Suppose the policy interest rate controlled by the central bank and the inflation rate were both zero. Explain in terms of the aggregate demand-aggregate supply framework how the economy could fall into a deflationary sp ...

What are derivatives define forward futures and option

What are derivatives? Define forward, futures, and option agreements. What are the underlying instruments in these agreements?

Finance questionyour company can undertake an investment

Finance question Your company can undertake an investment project today or next year. The cost of the investment is $100 regardless of when you invest. Currently, the expected value of cash ?ows from the project is $95 ( ...

Suppose that the government of chile reduces one of its key

Suppose that the government of Chile reduces one of its key interest rates. The values of several other Latin American currencies are expected to change substantially against the Chilean peso in response to the news. a. ...

Finance assignmentpart 1problem 1find the following values

Finance Assignment Part 1 PROBLEM 1 Find the following values for a lump sum: - The future value of $500 invested at 8 percent for one year - The future value of $500 invested at 8 percent for five years - The present va ...

Using the liquidity preference theory explain why the

Using the liquidity preference theory, explain why the quantity demanded of money is inversely related to the interest rate. What is a liquidity trap?

At the end of 2011 home depots total capitalization

At the end of 2011 Home Depot's total capitalization amounted to $28,992 million. In 2012 debt investors received interest income of $635 million. Net income to shareholders was $4,526 million. (Assume a tax rate of 35%. ...

Careers in financeuse the internet and or strayer resource

Careers in Finance Use the Internet and / or Strayer Resource Center to research career options within the field of finance. Consider the Bureau of Labor Statistics Website, and the Websites of finance professional assoc ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate