Investors' Choice Fund had NAV per share of $37.25 on January 1,2009.On December 31 of the same year the fund's rate of return for the year was 17.3%.Income distributions were $1.14 and the fund had capital gain distributions of $1.35.Without considering taxes and transactions costs,what ending NAV would you calculate for Investors' Choice?

Question

Quizplus · Accepted Answer

The correct answer is A. The ending NAV can be calculated as follows:NAV per share on January 1, 2009 = $37.25Rate of return for the year = 17.3%Income distributions = $1.14Capital gain distributions = $1.35Ending NAV per share = NAV per share on January 1, 2009 + (Rate of return for the year x NAV per share on January 1, 2009) + Income distributions + Capital gain distributions= $37.25 + (0.173 x $37.25) + $1.14 + $1.35= $41.20

Investors' Choice Fund Had NAV Per Share of $37