A mutual fund had NAV per share of $36.15 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 14.0%. Income distributions were $1.16, and the fund had capital gain distributions of $2.12. 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) = $36.15 + $1.16 + $2.12 + ($36.15 * 0.14) = $44.69.

A Mutual Fund Had NAV Per Share of $36