Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

AAFM GLO_CWM_LVL_1 Exam - Topic 2 Question 94 Discussion

Rahul had invested in an open ended Mutual Fund when the NAV of the fund was Rs. 10. After 6 months the NAV was Rs. 12. Calculate the annualized percentage change in the fund ignoring all charges.
C) 80%
A) 40%
B) 36.64%
D) 96%

AAFM GLO_CWM_LVL_1 Exam - Topic 2 Question 94 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 94
Topic #: 2
[All GLO_CWM_LVL_1 Questions]

Rahul had invested in an open ended Mutual Fund when the NAV of the fund was Rs. 10. After 6 months the NAV was Rs. 12. Calculate the annualized percentage change in the fund ignoring all charges.

Show Suggested Answer Hide Answer
Suggested Answer: C

by Whitley at Oct 18, 2024, 03:04 AM

Limited Time Offer

25%

Off

Get Premium GLO_CWM_LVL_1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Haley
6 months ago
Totally agree, 40% sounds right!
upvoted 0 times
...
Nada
7 months ago
Are we sure about that calculation? Seems off to me.
upvoted 0 times
...
Abel
7 months ago
I thought it would be higher than that!
upvoted 0 times
...
Noah
7 months ago
That's a 20% return for 6 months, so annualized is about 40%.
upvoted 0 times
...
Elmer
7 months ago
The NAV went from Rs. 10 to Rs. 12 in 6 months.
upvoted 0 times
...
Beckie
8 months ago
I thought the annualized return would be higher since the NAV increased so much, but I can't recall the exact calculation method.
upvoted 0 times
...
Selma
8 months ago
I feel like I might be overthinking it. Is it just the percentage change multiplied by 2 for the annualized figure?
upvoted 0 times
...
Ailene
8 months ago
This seems similar to a practice question we did on mutual funds. I think the annualized return is around 36.64%.
upvoted 0 times
...
Carma
8 months ago
I remember we calculated annualized returns in class, but I'm not sure if I got the formula right for this one.
upvoted 0 times
...
Luis
8 months ago
I've got this! The annualized percentage change is calculated as (final NAV / initial NAV)^(1/t) - 1, where t is the time period in years. In this case, t = 0.5 years, so I just need to plug in the values.
upvoted 0 times
...
Claribel
8 months ago
Hmm, I'm a bit confused on the formula to use here. Is it the simple percentage change formula or do I need to factor in the time period as well?
upvoted 0 times
...
Jaime
8 months ago
Okay, let me think this through step-by-step. The initial NAV was Rs. 10 and the final NAV after 6 months was Rs. 12. I need to calculate the annualized percentage change.
upvoted 0 times
...
Domonique
8 months ago
This seems like a straightforward calculation of the annualized percentage change in the fund's NAV. I'll need to use the formula for annualized return.
upvoted 0 times
...
Dominque
1 year ago
I'm impressed by Leontine's logical approach. Seems like the correct answer is 40%, but I wonder if Demetra forgot to carry the one or something?
upvoted 0 times
Janet
1 year ago
Rahul: It's actually 40%.
upvoted 0 times
...
Louvenia
1 year ago
Demetra: I think it's 36.64%.
upvoted 0 times
...
Marsha
1 year ago
Leontine: The annualized percentage change is 40%.
upvoted 0 times
...
...
Noel
1 year ago
I'm inclined to go with option B, 36.64%. The formula for annualized percentage change can be a bit tricky, but I think I've got it right this time.
upvoted 0 times
Sueann
12 months ago
Actually, the correct answer is option D, 96%. You need to annualize the 44% by multiplying by 2, not the final result.
upvoted 0 times
...
Noel
1 year ago
That gives us 0.44, which is 44%. But since we need the annualized percentage change, we need to multiply by 2 to get 88%.
upvoted 0 times
...
Lorrine
1 year ago
That's correct! So, it would be (1.2)^(2) - 1, which equals 1.44 - 1.
upvoted 0 times
...
Yolande
1 year ago
I think the formula for annualized percentage change is (NAV final / NAV initial)^(1/n) - 1, where n is the number of periods. So, in this case, it would be (12/10)^(1/0.5) - 1.
upvoted 0 times
...
...
Evette
1 year ago
Hmm, I got the same result as Leontine. 40% seems like the correct answer. Though I'm curious, did Demetra invest in a mutual fund or a crystal ball?
upvoted 0 times
...
Leontine
1 year ago
Okay, let me think through this step-by-step. If the NAV went from 10 to 12 in 6 months, that's a 20% increase. Annualizing that would give 40%, which is option A.
upvoted 0 times
...
Renato
1 year ago
I also calculated it and got the same answer, so I think we are correct
upvoted 0 times
...
Jolene
1 year ago
I agree with Stacey, the annualized percentage change can be calculated using the formula [(NAV final / NAV initial)^(1/n) - 1] * 100
upvoted 0 times
...
Demetra
1 year ago
The annualized percentage change seems to be quite high. I'm not sure if I'm missing something in the calculation.
upvoted 0 times
Tawanna
1 year ago
D) 96%
upvoted 0 times
...
Carlee
1 year ago
C) 80%
upvoted 0 times
...
Goldie
1 year ago
B) 36.64%
upvoted 0 times
...
Myra
1 year ago
A) 40%
upvoted 0 times
...
...
Stacey
1 year ago
I think the answer is B) 36.64%
upvoted 0 times
...

Save Cancel