Question #1: Definition Match (by number) each key term with its definition. i. Money Market Funds ______ ii. Emerging Market Funds ______ iii. REITS ______ iv. Income Funds ______ v. Life Cycle Funds ______

1. Funds that have a concentration on a particular industry. 2. Funds that focus on firms that have the greatest prospect of capital gains 3. Funds from investors are pooled to purchase a portfolio of assets that is fixed for the life of the fund. 4. Funds that are invested in the developing world. 5. Funds that focus on firms that have high dividend yields 6. Funds that invest in real estate or mortgage loans. 7. Funds that specialize in the fixed income (bond) sector. 8. Funds that invest in short-term debt instruments (i.e. t-bills, commercial paper, etc...) 9. Funds that hold fixed proportion of equities and fixed income assets in their portfolio.

Question #2 Mutual Funds (a) What is the key difference between an open-end mutual fund and a closed-end mutual fund? [4 Points] (b) Suppose that BlackRock Technology Opportunities Mutual Fund portfolio is comprised by the following stocks: Stock Shares in Portfolio Price per Share Microsoft Corp 4,000 $229.20 Apple Inc 9,400 $128.22 Alphabet Inc A 18,200 $88.84 Amazon.com 27,800 $85.60 Tencent Holdings 6,000 $45.05 The fund has liabilities of $987,540. Suppose that there are 58,000 shares outstanding. What is the net asset value (NAV) of this fund? Round your answer to two (2) decimal places. [10 Points] Question #3: Bond Pricing Calculate the prices of the following bonds (a) A 18 year $1000 face value coupon bond that pays an coupon rate of 3.8%. The YTM = 2.2%. Assume that the coupon payments are paid semi-annually. Round your answers to two (2) decimal places. (b) A 26 year $1000 face value coupon bond that pays an coupon rate of 3.47%. The YTM = 2.75%. Assume that the coupon payments are paid annually. Round your answers to two (2) decimal places. Question #4: Bond Pricing and Accrued Interest [14 Points] A 11 year $1000 face value coupon bond pays a coupon rate of 5.90% and has a YTM of 3.8%. Coupon payments made by the bond are paid semi-annually. (a) What is the current price of the bond? (b) Suppose that it has been 87 days since the last coupon payment. How much accrued interest must the buyer of the bond pay to the seller? Round your answer to two decimal places. [

Question # 5: Holding Period Return [ Assume that you have a one-year investment horizon and are trying to choose among two bonds. Both have the same default risk and mature in 10 years. The first is a zero-coupon bond that pays $1000 at maturity. The second is a $1000 par value coupon bond that has a coupon rate of 4.5% and makes an annual coupon payment. (a) If the YTM is equal to 3.3% what is the current prices for each of the bonds? [3 Points each; 6 Points Total] (b) Suppose that the YTM next year rises to 3.6%. Calculate the one year holding period return for each of the bonds. [Hint: One year has passed since you initially purchased the bond so you will need to calculate the new price of the bond next year with a new n] [7 Points each; 14 Points Total] Question #6: Current Yield A $1000 face-value coupon bond has a current yield of 5.45% and a market price of $927. What is the bonds coupon rate?