Question

10. You buy 20 mutual fund shares at a price of $57.40 per share. You elect...

10.

You buy 20 mutual fund shares at a price of $57.40 per share. You elect to reinvest distributions and, as a result, own 27.47 shares in 4 years. You sell the shares at a price of $66.30 per share, less brokerage fees of $30. Calculate your annual rate of return.

a.

12.69%
b.

14.56%
c.

12.23%
d.

11.76%
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

net selling price :[66.30*27.47]-30

             = 1791.261

         

purchase price= 20*57.4 = 1148

Annual rate of return = {[Selling price - purchase price ]/purchaseprice } *1/n

       ={[1791.261-1148] /1148}*1/ 4

          = {643.261/1148}*1/4

          = .5603*1/4

         = .1401 or 14.01%

correct option is " b" - 14.56%    [approx to 14.01%]

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
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 purchased shares of a mutual fund at a price of $20 per share at the...
You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 6.0%. If the securities in which the fund invested increased in value by 10% during the year, and the fund's expense ratio was 1.5%, your return if you sold the fund at the end of the year would be a. 1.99% b. 2.32% c. 1.65% d. 2.06% e. None of the options are correct
At the beginning of the year, you buy 800 shares in Muleshoe Mutual Fund, which currently...
At the beginning of the year, you buy 800 shares in Muleshoe Mutual Fund, which currently has a NAV of $48.10. The fund has a front-end load of 1.8%. Over the year, the fund distributed capital gains of $1.75 per share and dividend distributions of $1.42. At the end of the year, the NAV was at $54.47 and the offer price was at $55.45. A. If you sell after one year, what is your HPR? B. Recalculate your HPR, assuming...
64. You purchased shares of a mutual fund at a price of $20 per share at...
64. You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 5.75%. If the securities in which the fund invested increased in value by 11% during the year, and the fund's expense ratio was 1.25%, your return if you sold the fund at the end of the year would be A. 4.33%. B. 3.44%. C. 2.45%. D. 6.87%. {[$20 × 0.9425 × (1.11 –...
You purchased shares of a mutual fund at an offering price of $95 per share at...
You purchased shares of a mutual fund at an offering price of $95 per share at the beginning of the year and paid a front–end load of 3.50%. If the securities in which the fund invested increased in value by 12.25% during the year, and the fund’s expense ratio was 1.25%, what is your rate of return if you sold the fund at the end of the year?
A year​ ago, an investor bought 400 shares of a mutual fund at ​$8.51 per share....
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 ​$8.56 per share....
A year​ ago, an investor bought 600 shares of a mutual fund at ​$8.56 per share. Over the past​ year, the fund has paid dividends 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...
Consider a no-load mutual fund with $210 million in assets and 10 million shares at the...
Consider a no-load mutual fund with $210 million in assets and 10 million shares at the start of the year and with $260 million in assets and 11 million shares at the end of the year. During the year investors have received income distributions of $2 per share and capital gain distributions of $.30 per share. Assuming that the fund carries no debt, and that the total expense ratio is 1%, what is the rate of return on the fund?...
You purchased 500 shares of the New Fund at a price of $30 per share at...
You purchased 500 shares of the New Fund at a price of $30 per share at the beginning of the year. You paid a front-end load of 3%. The securities in which the fund invests increase in value by 15% during the year. The fund’s expense ratio is 1%. What is your rate of return on the fund if you sell your shares at the end of the year? (Hints: (i) the offering price was above $30; (ii) calculate expenses...
A. You have $21,000 to invest. You could purchase shares in one mutual fund or try...
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 securities in an equal weighted portfolio to achieve a reasonably well diversified portfolio. If you pay an average commission of 3% of the dollar value of the stock you buy you will have to pay ______ in commissions per stock for a total commission...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT