A year ago, the Very Large Growth Fund was being quoted at an NAV of $20.86 and an offer price of $21.73. Today, it's being quoted at $22.53 (NAV) and $23.47 (offer). What is the holding period return on this load fund, given that it was purchased a year ago and that its dividends and capital gains distributions over the year have totaled $0.96 per share? Assume that none of the dividends and capital gains distributions are reinvested into the fund. (Hint: You, as an investor, buy fund shares at the offer price and sell at the NAV.)

A year ago, the Very Large Growth Fund was being quoted at an NAV of $20.86 and an offer price of $21.73. Today, it's being quoted at $22.53 (NAV) and $23.47 (offer). What is the holding period return on this load fund, given that it was purchased a year ago and that its dividends and capital gains distributions over the year have totaled $0.96 per share? Assume that none of the dividends and capital gains distributions are reinvested into the fund. (Hint: You, as an investor, buy fund shares at the offer price and sell at the NAV.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You invest $10,000 today in the S&P 500 and expect to have a 8.25% return. After the Iinitial $10,000 investment you invest an additional $1000 per year but this $1000 will increase by 5% each year. Using excel show account balances from years 0 to 350 and assume this investment is put into a triple-levered Nasdaq index fund instead of the S&P 500 and the annual returns are 13.4%
The Closed Fund is a closed-end investment company with a portfolio currently worth $170 million. It has liabilities of $6 million and 9 million shares outstanding. Required: a. What is the NAV of the fund? b. If the fund sells for $20 per share, what is its premium or discount as a percent of net asset value?
The Yachtsman Fund had NAV per share of $36.12 on January 1, 2016. On December 31 of the same year, the fund's NAV was $39.71. Income distributions were $0.64, and the fund had capital gain distributions of $1.13. Without considering taxes and transactions costs, what rate of return did an investor receive on the Yachtsman Fund last year? A. 14.84% B. 14.39% C. 17.68% D. 18.52% E. 22.92%
You invested $90,000 in a mutual fund at the beginning of the year when the NAV was $54.3. At the end of the year, the fund paid $.40 in short-term distributions and $.57 in long-term distributions. If the NAV of the fund at the end of the year was $63.94, what was your return for the year? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
A hedge fund charges a management fee of 3 percent and an incentive fee of 25 percent for all returns over a benchmark return of 4%. The risk-free rate is 2% and the standard deviation of the funds continuously compounded returns has been 23%. The current net asset value is $55 per share. What is the value of all fees expressed as a percent at the start of the investment period?
About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.50 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.72 a share and had capital gains distributions of $2.50 a share. Assume that the mutual fund distributed the dividends and capital gains at the end of the year. Using the approximate yield formula, what rate of return did Eric earn on his investment? Round the answer to two decimal places. % Repeat the calculation using a handheld financial calculator. Round the answer to two decimal places. % What rate of return would he have earned if the stock had risen to $30 a share? Round the answer to two decimal places. %
K8.
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $59. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $44. What are the dividend yield and percentage capital gain in this case?
Suppose that at the start of the year, no-load mutual fund has a net asset value of $27.65 per share. During the year, it pays its shareholders a capital gain and dividend distribution of $1.18 per share and finishes the year with an NAV of $30.84. a. What is the return to an investor who holds 257.616 shares of this fund in his (nontaxable) retirement account? Do not round intermediate calculations. Round your answer to two decimal places. % b. What is the after-tax return for the same investor these shares were held in an ordinary savings account? Assume that the investor is in the 30% tax bracket, Do not round intermediate calculations. Round your answer to two decimal places. % c. If the investment company allowed the investor to automatically reinvest his cash distribution in additional fund shares, how many additional shares could the investor acquire? Assume that the distribution occurred at year end and that the proceeds from the distribution can be reinvested at the year-end…
Exxon has a distribution for its long-term growth rate as 5% (probability 50%), 6% (probability 30%), or 11% (probability 20%). Also, its dividend for this year has the following probability distribution: 20% $5, 50% $8, and 30% $10. What should you pay for Exxon stock if your required rate of return is 20% ?
Consider a mutual fund with OMR400 million in assets at the start of the year and with 20 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of OMR4 million. The stocks included in the portfolio increases in price by 10%, but no securities are sold and there are no capital gain distributions. The fund charges fees of 3%, which are deducted from the portfolio assets at year end. What is the net asset value at the start and end of the year? What is the rate of return for an investor in the fund?
The Closed Fund is a closed-end investment company with a portfolio currently worth $245 million. It has liabilities of $12 million and 17 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) b. If the fund sells for $10 per share, what is its premium or discount as a percent of net asset value? (Input the amount as a positive value. Round your answer to 2 decimal places.)

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