Question

You invest $1,000 at the beginning of 2030 in a mutual fund. If in 2030 the...

You invest $1,000 at the beginning of 2030 in a mutual fund. If in 2030 the fund has a holding-period-return of -18.06%, what return in 2031 would be necessary for your investment to recover its original value?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Value of the investment at the beginning of 2030 is 1000

Holding period return = (Value of investment at the end - Value of investment at the beginning)/ Value of investment at the beginning

-18.06% = (Value of investment at the end - 1000)/ 1000

-18.06%*1000 = (Value of investment at the end - 1000)

-180.60 +1000 = Value of investment at the end

Value of investment at the end = 819.40

Return to be earned in 2031 to recover its original value

=1000 - 819.40 i.e 180.60

Return in % in 2031 = 180.60 / 819.40 i.e 22.04%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You have invested in a particular mutual fund in the past. The fund has a 2%...
You have invested in a particular mutual fund in the past. The fund has a 2% front-end load and an expense ratio of 0.9%. The fund also has annual 12b-1 fees of 0.5%. Fund assets have returned on average 12% per year over the life of the fund. If you invest $10,000 in this fund, what total dollar amount would your investment be worth if you planned to hold the fund for 4 years? Assume the fund has the same...
You have invested in a particular mutual fund in the past. The fund has a 2%...
You have invested in a particular mutual fund in the past. The fund has a 2% front-end load and an expense ratio of 0.9%. The fund also has annual 12b-1 fees of 0.5%. Fund assets have returned on average 12% per year over the life of the fund. If you invest $10,000 in this fund, what total dollar amount would your investment be worth if you planned to hold the fund for 4 years? Assume the fund has the same...
You are going to invest in a stock mutual fund with a front-end load of 5...
You are going to invest in a stock mutual fund with a front-end load of 5 percent and an expense ratio of 1.57 percent. You also can invest in a money market mutual fund with a return of 2.6 percent and an expense ratio of 0.30 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon...
You are going to invest in a stock mutual fund with a front-end load of 3...
You are going to invest in a stock mutual fund with a front-end load of 3 percent and an expense ratio of 1.5 percent. You also can invest in a money market mutual fund with a return of 2.2 percent and an expense ratio of 0.30 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon...
Three years? ago, you invested in the Future Investco Mutual Fund by purchasing 1,000 shares of...
Three years? ago, you invested in the Future Investco Mutual Fund by purchasing 1,000 shares of the fund at the price of $ 19.51 per share. Because you did not need the? income, you elected to reinvest all dividends and capital gains distributions. ? Today, you sell your 1,100 shares in this fund for ?$22.02 per share. If there were a 1?% load on this? fund, what would your rate of return? be? The compounded rate of return on this...
You invested $1,000 in a mutual fund with a 6% front-end load and an expense ratio...
You invested $1,000 in a mutual fund with a 6% front-end load and an expense ratio of 1%. Expenses are paid at the end of each year. The fund produced an annual return of 4% before fees. What will be the value of your investment after 7 years?
Mutual Fund Returns(LO2, CFA2) You invested $10,000 in a mutual fund at the beginning of the...
Mutual Fund Returns(LO2, CFA2) You invested $10,000 in a mutual fund at the beginning of the year when the NAV was $32.24. A the end of the year, the fund paid $0.24 in short-term distributions and $0.41 in long-term distributions. If the NAV of the fund at the end of the year was $35.23, what was your return for the year?
You invested in the​ no-load OhYes Mutual Fund one year ago by purchasing 700 shares of...
You invested in the​ no-load OhYes Mutual Fund one year ago by purchasing 700 shares of the fund at the net asset value of ​$25.46 per share. The fund distributed dividends of ​$2.67 and capital gains of ​$2.12. ​Today, the NAV is ​$27.15. What was your holding period​ return? Your holding period return was _​%. ​
An investor has ​$60000 to invest in a CD and a mutual fund. The CD yields...
An investor has ​$60000 to invest in a CD and a mutual fund. The CD yields 7​% and the mutual fund yields 5​%. The mutual fund requires a minimum investment of ​$9 000​, and the investor requires that at least twice as much should be invested in CDs as in the mutual fund. How much should be invested in CDs and how much in the mutual fund to maximize the​ return? What is the maximum​ return? To maximize​ income, the...
You have $500,000 to invest in two mutual funds. Fund A has an expected return of...
You have $500,000 to invest in two mutual funds. Fund A has an expected return of 18% and fund B has an expected return of 10%. How much must you invest in each fund to have an overall expected return of 15%?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT