Consider a mutual fund with $200 million in assets at the start of the year and with 10 million shares outstanding. The fund portfolio of stocks that provides dividend income at the end of the year of $2 million. The stocks included in the fund's portf increase in price by 8%, but no securities are sold, and there are no capital gains distributions. The fund charges 12b-1 fees which are deducted from portfolio assets at year-end. Required: a. What is the net asset value at the start and end of the year? (Enter your answers in dollars rounded to 3 decimal places. Answer is complete but not entirely correct. Net Asset Value Start of the year End of the wor $ s 20.000 Per share 21 582 Y Ror charo
Consider a mutual fund with $200 million in assets at the start of the year and with 10 million shares outstanding. The fund portfolio of stocks that provides dividend income at the end of the year of $2 million. The stocks included in the fund's portf increase in price by 8%, but no securities are sold, and there are no capital gains distributions. The fund charges 12b-1 fees which are deducted from portfolio assets at year-end. Required: a. What is the net asset value at the start and end of the year? (Enter your answers in dollars rounded to 3 decimal places. Answer is complete but not entirely correct. Net Asset Value Start of the year End of the wor $ s 20.000 Per share 21 582 Y Ror charo
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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Transcribed Image Text:Consider a mutual fund with $200 million in assets at the start of the year and with 10 million shares outstanding. The fund invests in a
portfolio of stocks that provides dividend income at the end of the year of $2 million. The stocks included in the fund's portfolio
increase in price by 8%, but no securities are sold, and there are no capital gains distributions. The fund charges 12b-1 fees of 1%,
which are deducted from portfolio assets at year-end.
Required:
a. What is the net asset value at the start and end of the year? (Enter your answers in dollars rounded to 3 decimal places.)
Answer is complete but not entirely correct.
Net Asset
Value
Start of the year
End of the year
$
$
20.000
21.582
Per share
Per share
b. What is the rate of return for an investor in the fund? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Answer is complete but not entirely correct.
Rate of
return
7.91 %
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