Total returns on mutual funds can be calculated by adding dividends distributed,capital gains distributed,and ________ and dividing this sum by the beginning NAV.
A)beginning NAV - ending NAV
B)ending NAV - beginning NAV
C)dividends undistributed + capital gains undistributed
D)beginning NAV + ending NAV
E)ending NAV + beginning NAV

Question

Quizplus · Accepted Answer

The calculation of total returns on mutual funds involves adding the dividends distributed, capital gains distributed, and any change in the NAV (net asset value) of the fund. Since the beginning NAV is used as a reference point, the change in NAV is represented by the difference between the ending and beginning NAV. Therefore, the correct formula for calculating total returns is: (dividends distributed + capital gains distributed + (ending NAV - beginning NAV)) / beginning NAV. Hence, option B is the correct choice as it represents the change in NAV that needs to be included in the calculation.

Total Returns on Mutual Funds Can Be Calculated by Adding