INVESTMENTS (LOOSELEAF) W/CONNECT
11th Edition
ISBN: 9781260465945
Author: Bodie
Publisher: MCG
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Question
Chapter 4, Problem 12PS
Summary Introduction
Adequate information:
Opening NAV of the fund - $ 12.50
Closing NAV of the fund- $ 12.10
Income distributed during the year - $ 1.50
To compute:
Introduction:
Total return to the investor during a particular period is the sum total of change in the NAV of the fund during the period and income distributed during the period.
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Corporate Fund started the year with a net asset value of $12.50. By year-end, its NAV equaled $12.10. The fund paid year-end distributions of income and capital gains of $1.50. What was the (pretax) rate of return to an investor in the fund?
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 2% premium to NAV. By the end of the year, the fund is selling at a 7% discount to NAV. The fund paid year-end distributions of income and capital gains of $1.50.a. What is the rate of return to an investor in the fund during the year?b. What would have been the rate of return to an investor who held the same securities as the fund manager during the year?
A closed-end fund starts the year with a net asset value of $12.00. By year-end, NAV equals $12.70. At the beginning of the year, the fund was selling at a 4% premium to NAV. By the end of the year, the fund is selling at a 4% discount from NAV. The fund paid year-end distributions of income and capital gains of $1.30.
a. What is the rate of return to an investor in the fund during the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. What would have been the rate of return to an investor who held the same securities as the fund manager during the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Chapter 4 Solutions
INVESTMENTS (LOOSELEAF) W/CONNECT
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