A mutual fund had NAV per share of $37.12 on January 1,2009.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

To calculate the ending NAV, we need to add the rate of return to the starting NAV and then subtract any income distributions and/or capital gain distributions. 
Starting NAV = $37.12 
Rate of return = 11.0% = 0.11 
Income distributions = $2.26 
Capital gain distributions = $1.64 
Ending NAV = (37.12 * 1.11) - 2.26 - 1.64 = $37.30 
So the answer is C.

A Mutual Fund Had NAV Per Share of $37