Question

1. Assume that one year ago, you bought 120 shares of a mutual fund for $25 per share and that you received an income dividend of $0.25 cents per share and a capital gain distribution of $0.34 cents per share during the past 12 months. Also assume the market value of the fund is now $31 a share. Calculate the total return for this investment if you were to sell it now.

2. Assume that one year ago, you bought 170 shares of a mutual fund for $28 per share and that you received an income dividend of $0.14 cents per share and a capital gain distribution of $0.28 cents per share during the past 12 months. Also assume the market value of the fund is now $31 a share. Calculate the percentage of total return for your $4,760 investment.

Answer #1

Answer 1 | ||||||

Units | Amount per share | Total | ||||

Net Investment | 120 | 25 | 3000 | |||

Sale Value | 120 | 31 | 3720 | |||

Profit on sale | 720 | |||||

Profit of Dividend | 120 | 0.25 | 30 | |||

Profit of CG Distribution | 120 | 0.34 | 40.8 | |||

TOTAL PROFIT | 790.8 | |||||

Total Return for this investment | 790.8 | |||||

Answer 2 | ||||||

Units | Amount per share | Total | ||||

Net Investment | 170 | 28 | 4760 | |||

Sale Value | 170 | 31 | 5270 | |||

Profit on sale | 510 | |||||

Profit of Dividend | 170 | 0.14 | 23.8 | |||

Profit of CG Distribution | 170 | 0.28 | 47.6 | |||

TOTAL PROFIT | 581.4 | |||||

Total Return for this investment | 581.4 | |||||

% of total return | 581.4 / 4760 | 12.21% | ||||

A year ago, an investor bought 400 shares of a mutual fund at
$8.51 per share. Over the past year, the fund has paid dividends
of $0.83 per share and had a capital gains distribution of $0.69
per share.
a. Find the investor's holding period return, given that this
no-load fund now has a net asset value of $9.28.
b. Find the holding period return, assuming all the dividends
and capital gains distributions are reinvested into additional
shares of the...

A year ago, an investor bought 600 shares of a mutual fund at
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of $0.89 per share and had a capital gains distribution of $0.65
per share.
a. Find the investor's holding period return, given that this
no-load fund now has a net asset value of $9.11. ( answer in % and
2 decimal places)
b. Find the holding period return, assuming all the dividends
and capital gains...

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per share) and long-term capital gain distributions of 38 stock
mutual fund shares (also $61 per share). What are the tax
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28% marginal tax bracket?

A. You have $21,000 to invest. You could purchase shares in one
mutual fund or try to diversify on your own. From your investment
class you learn that you need to hold at least 25 different
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Chapter 13
Financial Planning Exercise 9
Calculating approximate yield on mutual fund
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cents a share and had capital gains distributions of $1.03 a
share.
Using the approximate yield formula, what rate of return did
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Your holding period return was _%.

Three years? ago, you invested in the Future Investco Mutual
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