Corporate Fund started the year with a net asset value of $12.90. By year-end, its NAV equaled $12.30. The fund paid year-end distributions of income and capital gains of $1.40. What was the rate of return to an investor in the fund

Question

Yusuf Allison

Business

18 September, 04:24

Corporate Fund started the year with a net asset value of $12.90. By year-end, its NAV equaled $12.30. The fund paid year-end distributions of income and capital gains of $1.40. What was the rate of return to an investor in the fund

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Chad Rose · Answer 1

6.201%

Explanation:

Given that,

Net asset value = $12.90

By year-end net asset value = $12.30

Fund paid year-end distributions of income and capital gains = $1.40

change in NAV:

= By year-end net asset value - Net asset value

= $12.30 - $12.90

= - $0.6

Rate of Return:

= (change in net asset value + Distributions) : Start of Year net asset value

= (-$0.6 + $1.40) : $12.90

= 0.8 : $12.90

= 0.06201 or 6.201%