Investors' Choice Fund had NAV per share of $37.25 on January 1, 2012. On December 31 of the same year the fund's rate of return for the year was 17.3%. Income distributions were $1.14, and the fund had capital gain distributions of $1.35. Without considering taxes and transactions costs, what ending NAV would you calculate for Investors' Choice?

Question

Ethen Stewart

Business

29 November, 18:36

Investors' Choice Fund had NAV per share of $37.25 on January 1, 2012. On December 31 of the same year the fund's rate of return for the year was 17.3%. Income distributions were $1.14, and the fund had capital gain distributions of $1.35. Without considering taxes and transactions costs, what ending NAV would you calculate for Investors' Choice?

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Elsa Marquez · Answer 1

As fund rate of return = (final NAV - Initial NAV + Income distribution) / (Initial NAV)

17.3% = (final NAV - 37.25 + 1.14 +

1.35) / 37.25

Final NAV = 34.76 + 6.44

= 41.2 is the answer (ending

NAV)