Consider a mutual fund with $218 million in assets at the start of the year and with 10 million shares outstanding. The fund invests in aportfolio of stocks that provides dividend income at the end of the year of $4 million. The stocks included in the fund's portfolioincrease in price by 8%, but no securities are sold, and there are no capital gains distributions. The fund charges 12b-1 fees of 1.00%,which are deducted from portfolio assets at year-end.Required:a. What is the net asset value at the start and end of the year? (Enter your answers in dollars rounded to 3 decimal places.)× Answer is complete but not entirely correct.Net AssetValueStart of the year$End of the year$6921.800Per share23.705 x Per shareb. What is the rate of return for an investor in the fund? (Do not round intermediate calculations. Round your answer to 2 decimalplaces.)× Answer is complete but not entirely correct.Rate of10.57 %return

Part (a): Net Asset Value (NAV) Given data:- Assets at the start of the year = $218 million- Number…

Answered: Consider a mutual fund with $218…

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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None

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