A mutual fund had NAV per share of $37.12 on January 1, 2016.On December 31 of the same year, the fund's rate of return for the year was 11.0%.Income distributions were $2.26, and the fund had capital gain distributions of $1.64.Without considering taxes and transactions costs, what ending NAV would you calculate?

Question

Quizplus · Accepted Answer

The formula to calculate ending NAV is as follows:

Ending NAV = Beginning NAV + Income Distributions + Capital Gain Distributions + (Rate of Return x Beginning NAV)

Plugging in the given values:

Ending NAV = 37.12 + 2.26 + 1.64 + (0.11 x 37.12) = 37.30

Therefore, the ending NAV would be $37.30. Option C is the correct answer.

A Mutual Fund Had NAV Per Share of $37