GEN COMBO LOOSELEAF INVESTMENTS; CONNECT ACCESS CARD
11th Edition
ISBN: 9781260201550
Author: Bodie
Publisher: MCG
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Question
Chapter 4, Problem 13PS
Summary Introduction
(A)
Adequate information:
Opening NAV of the fund - $ 12
Closing NAV of the fund- $ 12.10
Income distributed during the year - $ 1.50
At the beginning of the year fund is selling at 2% premium
At the end of the year fund is selling at 7% discount
To compute:i)
Introduction:
Total return to the investor in fund during a particular period is the sum total of change in the selling price (i.e. NAV after premium or discount) of the fund during the period and income distributed during the period.
Summary Introduction
(B)
Adequate information:
Opening NAV of the fund - $ 12
Closing NAV of the fund- $ 12.10
Income distributed during the year - $ 1.50
At the beginning of the year fund is selling at 2% premium
At the end of the year fund is selling at 7% discount
To compute:rate of return to investor who held securities as fund manager
Introduction:
Total return to the investor in fund during a particular period is the sum total of change in the selling price (i.e. NAV after premium or discount) of the fund during the period and income distributed during the period.
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A closed-end fund starts the year with a net asset value of $12.00. By year-end, NAV equals $12.10. At the beginning of the year, the fund was selling at a 2% premium to NAV. By the end of the year, the fund is selling at a 7% discount to NAV. The fund paid year-end distributions of income and capital gains of $1.50.a. What is the rate of return to an investor in the fund during the year?b. What would have been the rate of return to an investor who held the same securities as the fund manager during the year?
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Chapter 4 Solutions
GEN COMBO LOOSELEAF INVESTMENTS; CONNECT ACCESS CARD
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