The Yachtsman Fund had NAV per share of $36.12 on January 1, 2016. On December 31 of the same year, the fund's NAV was $39.71. Income distributions were $0.64, and the fund had capital gain distributions of $1.13. Without considering taxes and transactions costs, what rate of return did an investor receive on the Yachtsman Fund last year?

Question

Quizplus · Accepted Answer

The rate of return is calculated as (Ending NAV + Income distributions + Capital gain distributions - Beginning NAV) / Beginning NAV. In this case, the rate of return is (39.71 + 0.64 + 1.13 - 36.12) / 36.12 = 0.2292, or 22.92%.

The Yachtsman Fund Had NAV Per Share of $36