Sub- Accounting You pay $23,600 to the Laramie Fund, which has a NAV of $31 per share at the beginning of the year. The fund deducted a front-end load of 6%. The securities in the fund increased in value by 10% during the year. The fund's expense ratio is 1.6% and is deducted from year-end asset values. What is your rate of return on the fund if you sell your shares at the end of the year? 1.75% 18.26% 14.78% 12.97%

Sub- Accounting You pay $23,600 to the Laramie Fund, which has a NAV of $31 per share at the beginning of the year. The fund deducted a front-end load of 6%. The securities in the fund increased in value by 10% during the year. The fund's expense ratio is 1.6% and is deducted from year-end asset values. What is your rate of return on the fund if you sell your shares at the end of the year? 1.75% 18.26% 14.78% 12.97%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.
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