Question

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 distributions are reinvested into additional shares of the fund at an average price of ​$8.79 per share.

Homework Answers

Answer #1

a. Holding Period Return = (Ending Net Asset Value - Beginning Net Asset Value + Dividends + Capital gains) /  Beginning Net Asset Value*100

= (9.11-8.56+0.89+0.65)/8.56*100

= 24.42%

Answer = 24.42%

b. Cost of Purchase = 600 Shares *$ 8.56

= $ 5,136

Amount reinvested = (Dividends + Capital Distribution)*Number of Shares

= (0.89+0.65)*600

= $ 924

Units received for the amount reinvested = Amount reinvested / average price

= $ 924/$ 8.79

=105.1194539 units

Total Units after reinvestment = 600 units + 105.1194539 units

= 705.1194539 units

Closing Amount = $ 9.11 * 705.1194539 units

= $ 6,423.638225

Holding Period return = (Closing Amount - Cost of Purchase)/Cost of Purchase*100

= ($ 6,423.638225-5,136)/5,136*100

= 25.07%

Answer = 25.07%

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
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, 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...
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 ​$27.15. What was your holding period​ return? Your holding period return was _​%. ​
You invested in the? no-load OhYes Mutual Fund one year ago by purchasing 600 shares of...
You invested in the? no-load OhYes Mutual Fund one year ago by purchasing 600 shares of the fund at the net asset value of ?$ 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?
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...
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...
Ronnie owns 600 shares of a stock mutual fund. This year he received dividend distributions of...
Ronnie owns 600 shares of a stock mutual fund. This year he received dividend distributions of 60 stock mutual fund shares ($61 per​ share) and​ long-term capital gain distributions of 38 stock mutual fund shares​ (also $61 per​ share). What are the tax consequences of​ Ronnie's stock mutual fund ownership if he is in a 28​% marginal tax​ bracket?
1. Assume that one year ago, you bought 120 shares of a mutual fund for $25...
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...
Assume that one year ago, you bought 320 shares of a mutual fund for $22 per...
Assume that one year ago, you bought 320 shares of a mutual fund for $22 per share and that you received an income dividend of $0.17 cents per share and a capital gain distribution of $0.22 cents per share during the past 12 months. Also assume the market value of the fund is now $24 a share. Calculate the total return for this investment if you were to sell it now. (Do not round intermediate calculations. Round your answer to...