A mutual fund had NAV per share of $26.25 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 16.4%. Income distributions were $1.27, and the fund had capital gain distributions of $1.85. Without considering taxes and transactions costs, what ending NAV would you calculate?

Question

Quizplus · Accepted Answer

The ending NAV can be calculated by adding the income and capital gain distributions to the initial NAV, then applying the rate of return. Ending NAV = Initial NAV + Income Distributions + Capital Gain Distributions + (Initial NAV * Rate of Return) = $26.25 + $1.27 + $1.85 + ($26.25 * 0.164) = $27.44.

A Mutual Fund Had NAV Per Share of $26