Consider a mutual fund with $218 million in assets at the start of the year and...

60.1K

Verified Solution

Question

Finance

Consider a mutual fund with $218 million in assets at the startof the year and with 10 million shares outstanding. The fundinvests in a portfolio of stocks that provides dividend income atthe end of the year of $4 million. The stocks included in thefund's portfolio increase in price by 8%, but no securities aresold, and there are no capital gains distributions. The fundcharges 12b-1 fees of 1.00%, which are deducted from portfolioassets at year-end.
a. What is net asset value at the start and endof the year? (Enter your answers in dollars rounded to 3decimal places.)
Net Asset Value
Start of the year $
End of the year
b. What is the rate of return for an investorin the fund? (Do not round intermediate calculations. Roundyour answer to 2 decimal places.)
Rate of return %

Answer & Explanation Solved by verified expert

4.3 Ratings (601 Votes)

SEE THE See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Consider a mutual fund with $218 million in assets at the startof the year and with 10 million shares outstanding. The fundinvests in a portfolio of stocks that provides dividend income atthe end of the year of $4 million. The stocks included in thefund's portfolio increase in price by 8%, but no securities aresold, and there are no capital gains distributions. The fundcharges 12b-1 fees of 1.00%, which are deducted from portfolioassets at year-end.a. What is net asset value at the start and endof the year? (Enter your answers in dollars rounded to 3decimal places.)Net Asset ValueStart of the year$End of the yearb. What is the rate of return for an investorin the fund? (Do not round intermediate calculations. Roundyour answer to 2 decimal places.)Rate of return %