Question

You invested $10,000 in a mutual fund 18 months ago when the NAV of the fund...

You invested $10,000 in a mutual fund 18 months ago when the NAV of the fund was $40. You have not acquired or sold any shares since that time. Today, the NAV is $32. The fund charges a contingent deferred sales charge of 5 percent the first year with the charge decreasing by 1 percent each year. How much money will he receive if he redeems his shares today

Homework Answers

Answer #1

Answer to the question :

Given : Amount invested $10,000

NAV at the time of investment = $40 per unit

Number of units purchsed = $10,000/40

=250 units

NAV after 18 months of purchase = $32 per unit

Contingent deffered sales charges are 5% for the first year and decrease by 1% for each year holding i.e. 4% for year 2, 3% for year 3 and so on.

Since in the given case investment holding period is 18 months therefore contingent deffered sales charges are 4%

Therefore amount recieved by the investor if he redeemed his shares today

= Number of units * NAV at the time of redemption -Deferred sales charges @4%

=250 units * $32 per unit - (250units * $32 per unit * 4% )

= $7,680

Amount received by the investor if he redeems his shares today is $7,680 against his invesmtment of $10,000 made by his 18 months ago.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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 $35.23, what was your return for the year?
You invested in the? no-load OhYes Mutual Fund one year ago by purchasing 600 shares of...
You invested in the? no-load OhYes Mutual Fund one year ago by purchasing 600 shares of the fund at the net asset value of ?$ 24.51 per share. The fund distributed dividends of ?$2.11 and capital gains of ?$1.58. ?Today, the NAV is ?$26.20. If OhYes was a load fund with a 3.5?% ?front-end load, what would be the? HPR?
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 _​%. ​
The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During...
The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 1.7 percent. If you had invested $25,000 in this fund at the start of the year, how many shares would you own at the end of the year? WHat will the NAV of this fund be at the end of the year? Why?
1.You invested in the​ no-load OhYes Mutual Fund one year ago by purchasing 800 shares of...
1.You invested in the​ no-load OhYes Mutual Fund one year ago by purchasing 800 shares of the fund at the net asset value of ​$25.75 per share. The fund distributed dividends of ​$1.81 and capital gains of ​$1.64. ​Today, the NAV is ​$26.84. If OhYes was a load fund with a 2​% ​front-end load, what would be the​ HPR? 2.One year​ ago, Super Star​ Closed-End Fund had a NAV of​$10.38 and was selling at​ a(n) 16% discount.​ Today, its NAV...
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 bought Giant Growth Fund a year ago when it had a NAV of $21.50. The...
You bought Giant Growth Fund a year ago when it had a NAV of $21.50. The fund has a 3% front-end load. Today the fund is quoted at a NAV of $23.04 and an offer price of $23.73. Dividends and capital gains distributions over the year have totaled $1.05 per share. Calculate your HPR. Recalculate your HPR if this were a no-load fund.
Bob decides to make an investment of $1,000,000 in Big Red Mutual Fund. This funds has...
Bob decides to make an investment of $1,000,000 in Big Red Mutual Fund. This funds has an expense ratio of 1 percent and charges 2 percent (12b-1) and 3 precent in a back-end load for the fund. The fund earns 9 percent on the portfolio before the costs that have been mentioned. How much will Bob receive if he redeems his shares at the end of the year
A year​ ago, the Really Big Growth Fund was being quoted at an NAV of ​$21.63...
A year​ ago, the Really Big Growth Fund was being quoted at an NAV of ​$21.63 and an offer price of ​$22.77. ​Today, it's being quoted at ​$23.56 ​(NAV) and ​$24.80 ​(offer). What is the holding period return on this load​ fund, given that it was purchased a year ago and that its dividends and capital gains distributions over the year have totaled ​$1.38 per​ share? Assume that none of the dividends and capital gains distributions are reinvested into the...
Five years ago you invested $10,000 in a mutual fund. You have earned the following annual...
Five years ago you invested $10,000 in a mutual fund. You have earned the following annual returns over the last five years {+18%,-4%,+10%,+22%,-16%}. What is the Arithmetic Mean of the five annual returns? A) 5% B) 6% C) 3% D) 4% What is the standard deviation of the sample of the above five returns? A) 15.8% B) 10.4% C) 12.9% D) 14.1% A company has the following cashflows: Year 0: -240,000, Year 1: +10,000, Year 2: +55,000, Year 3: +100,000,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT