Required: Use the approximate yield formula to compute the rate of return on the investmentin Part A and B, respectively
Posted: Thu May 19, 2022 7:12 am
Required: Use the approximate yield formula to compute the rate
of return on the investmentin Part A and B, respectively.Show your
computations to receive partial credit. For dollaramount, keep two
decimal places. For the approximate yields,express them as
percentageswith three decimal places.
a) Patty purchased 500 shares of a no-load mutual fund at a net
asset value (NAV) of $170per share. During the year, Patty received
dividend income distributions of $9 per shareand capital gains
distributions of$18.20 per share.At the end of the year, the shares
hada NAV of $160 per share.
b)Fargo Growth Fund is a load fund.A year ago, it was being quoted
at a NAV of $66.50and an offer price of $72.80; today, it's being
quoted at a NAV of $68.36 and an offerprice of $74.06.Use the
approximate yield formular to calculate the rate of return on
thisload fund. The dividends and capital gains distributions over
the two-year period aretotaled at $9.20 per share.
c)Identify and explain at least THREE types of costs that should be
taken into considerations when evaluating the return on investment
in mutual funds. (5 marks)
of return on the investmentin Part A and B, respectively.Show your
computations to receive partial credit. For dollaramount, keep two
decimal places. For the approximate yields,express them as
percentageswith three decimal places.
a) Patty purchased 500 shares of a no-load mutual fund at a net
asset value (NAV) of $170per share. During the year, Patty received
dividend income distributions of $9 per shareand capital gains
distributions of$18.20 per share.At the end of the year, the shares
hada NAV of $160 per share.
b)Fargo Growth Fund is a load fund.A year ago, it was being quoted
at a NAV of $66.50and an offer price of $72.80; today, it's being
quoted at a NAV of $68.36 and an offerprice of $74.06.Use the
approximate yield formular to calculate the rate of return on
thisload fund. The dividends and capital gains distributions over
the two-year period aretotaled at $9.20 per share.
c)Identify and explain at least THREE types of costs that should be
taken into considerations when evaluating the return on investment
in mutual funds. (5 marks)