Couch Potato Furniture purchased 100 shares of Natural Spring mutual fund at a net asset value of $56 per share.During the year Patty received dividend income distributions of $3.00 per share and capital gains distributions of $5.20 per share.At the end of the year the shares had a net asset value of $53 per share.What was Couch Potato's rate of return on this investment?

Question

Quizplus · Accepted Answer

The rate of return is calculated as (Ending NAV - Beginning NAV + Dividends + Capital Gains) / Beginning NAV. Here, it is ($53 - $56 + $3 + $5.20) / $56 = $5.20 / $56 = 9.29%.

Couch Potato Furniture Purchased 100 Shares of Natural Spring Mutual