TAGUIAM, RICA ANNE G.

07_Activity_1

I. INVESTMENT DECISIONS
1. Before investing, you should first consider these factors that will determine when,
where, and how to invest:
• Best use for your money
The most important factor to consider if it is the right time for you to invest is
to look at the best use of your money. For example, wouldn’t it make more
sense to pay your debt? The money you are spending on the interest of your
high credit card debt may be higher than what you might earn when you invest.
• Your objective for investing
A factor that determines where to invest your money is your objective for
investing. You may want to hopefully grow your money fast and you do not
care if you risk it because you have more time to pick yourself up and recover
from a downturn. Or your goal is just to preserve your capital in the safest way
because you will need your money soon, and it is important that it does not
lose its value.
2. Yes, because it is the price which you buy the unit of a scheme. And it may also be the
price at which you would sell the unit. When the value of the securities in the fund goes
up, the net asset value goes up.

3.
II. COLLECTIVE INVESTMENT SCHEMES (CIS)
a. Open End Fund, because it is mutual fund that can issue unlimited new shares, priced
daily on their net asset value. The fund sponsor sells shares directly to investors and
redeems them as well. Some mutual funds, hedge funds, and exchange-traded funds
(ETFs) are types of open-end funds.

b. Solution:

Total Market Value of shares today P 520,800,000

Add: Interest and Dividends received today 8,000,000
Less: Expenses incurred today (15,624,000)
The market value of the fund P 513,176,000

Net Asset Value per share= 513,176,000/5,000,000

= 102.64 per share
c. Solution:
Total Market Value of shares today P 520,800,000
Add: Interest and Dividends received today 8,000,000
Less: Expenses incurred today (15,624,000)
The market value of the fund P 513,176,000

Net Asset Value per unit= 513,176,000/5,000,000

= 102.64 per unit

Unit of Participation
6,000,000/102.64 per unit
= 58,456.74 per units