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Chapter 13 eBook Financial Planning Exercise 9 Calculating approximate return on a mutual fund About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.80 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.51 a share and had capital gains distributions of $1.03 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. % Hide Feedback Incorrect Check My Work

Chapter 13 eBook Financial Planning Exercise 9 Calculating approximate return on a mutual fund About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.80 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.51 a share and had capital gains distributions of $1.03 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. % Hide Feedback Incorrect Check My Work

Essentials Of Investments
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
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Chapter 13 eBook Financial Planning Exercise 9 Calculating approximate return on a mutual fund About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.80 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.51 a share and had capital gains distributions of $1.03 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. % Hide Feedback Incorrect Check My Work
Transcribed Image Text:Chapter 13 eBook Financial Planning Exercise 9 Calculating approximate return on a mutual fund About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $25.80 a share, and it now trades at $26.30. Last year, the fund paid dividends of $0.51 a share and had capital gains distributions of $1.03 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. % Hide Feedback Incorrect Check My Work
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