Solution-What would have been the rate of return

What would have been the rate of return

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Question -

a) You purchased 1,000 shares of the New Fund at a price of $20 per share at the beginning of the year. You paid a front-end load of 4%. The securities in which the fund invests increase in value by 12% during the year. The fund's expense ratio is 1.2%. What is your rate of return on the fund if you sell your shares at the end of the year?

b) A closed-end fund starts the year with a net asset value of $12.00. By year-end, NAV equals $12.10. At the beginning of the year, the fund was selling at a 3% premium to NAV. By the end of the year, the fund is selling at a 9% discount to NAV. The fund paid year-end distributions of income and capital gains of $2.00.

i) What is the rate of return to an investor in the fund during the year?

ii) What would have been the rate of return to an investor who held the same securities as the fund manager during the year?

Reference no: EM132607852

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What would have been the rate of return

Reference no: EM132607852

Reference no: EM132607852

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