Assume that you purchased 200 shares of Super Performing mutual fund at a net asset value of $21 per share. During the year, you received dividend income distributions of $1.50 per share and capital gains distributions of $2.85 per share. At the end of the year, the shares had a net asset value of $23 per share. What was your rate of return on this investment?

Question

Quizplus · Accepted Answer

The rate of return is calculated as follows:Rate of return = (Dividend income + Capital gains + Change in NAV) / Initial investmentRate of return = ($1.50 + $2.85 + ($23 - $21)) / ($21 x 200)Rate of return = $30.24 / $4,200Rate of return = 0.072Rate of return = 7.2%

Assume That You Purchased 200 Shares of Super Performing Mutual