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# An equity mutual fund invests in 200 stocks. The value of the fund was \$1.215 billion at the…

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An equity mutual fund invests in 200 stocks. The value of the fund was \$1.215 billion at the beginning of the year. During the year, stocks were purchased with a value of \$454 million, and stocks were sold with a value of \$388 million. The fund has a year-end value of \$1.336 billion. There are \$45 million in short term liabilities.

a) Compute the NAV per share if there are 88,567,211 shares outstanding. b) Computetheannualportfolioturnover.

2. An open-end mutual fund has a NAV of \$10.70 per share and an 8% load. How many shares can you purchase with a \$2000 investment? What is the effective cost per share? By how much must the NAV increase for you to “break even” on your \$2000 investment?

3. Assume you invested \$10,000 in a mutual fund in June 2020 when the NAV was \$22.56 per share. At the end of the year, the fund pays distributions of \$2.12 per share (\$0.47 income, \$1.65 capital gains). You have elected to “reinvest” your distributions, and at that time the NAV of the fund is \$24.01 per share.

Now, in Oct 2021, the fund’s NAV is \$25.12. How much is your investment worth now? What rate of return have you earned? How would you answers change if the fund had charged you a 5% front end load?

4. Assume you invested \$50,000 in a mutual fund in 2020 when the NAV was \$66.33 per share. At the end of the year, the fund paid distributions of \$3.82 per share (\$1.18 income, \$2.91 capital gains). You elected to “reinvest” your distributions, and at they were reinvested at a NAV of \$65.05 per share.

Now the fund’s NAV is \$67.75. How much is your investment worth now? What rate of return have you earned? How would you answers change if the fund had charged you a 4% front end load?