1) What is a mutual fund? In what sense is it a financial institution? What benefits do mutual funds provide individual investors?
2) What are the three components of the return that an investor receives from a mutual fund? How is the net asset value (NAV) of a mutaul fund
determined? What is meant by the term market-to-market daily?
3) An investor purchases a mutual fund share for $100. The fund pays dividends of $3 distributes a cqapital gain of $4 and cahrges a fee of
$2 when the fund is sold one year later for $105. What is the net rate of return from this investment?
4) Describe the difference between a defined benefit pension fund and a defined contribution pension fund?
5) Describe the major features of ERISA.
6) Your employer uses a flat benefit formula to determine retirement payments to its employees. The fund pays an annual benefit of $2500 per
year of service. Calculate your annual benefit payments for 25 28 and 30 years of service.