A mutual fund had NAV per share of $16.75 on January 1,2009.On December 31 of the same year the fund's rate of return for the year was 26.6%.Income distributions were $1.79 and the fund had capital gain distributions of $2.80.Without considering taxes and transactions costs,what ending NAV would you calculate?

Question

Quizplus · Accepted Answer

The ending NAV is calculated by adding the income and capital gain distributions to the initial NAV, then applying the rate of return: $16.75 + $1.79 + $2.80 = $21.34. Then, $21.34 * (1 - 0.266) = $16.62.

A Mutual Fund Had NAV Per Share of $16