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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?