In January, 1992, the NAV for a fund was $15. Over the year it paid no dividends but distributed a capital gain of $.80. At the end of the year, the NAV was $17.50. The rate of return for the year was

Question

Quizplus · Accepted Answer

The rate of return is calculated by taking the ending NAV, adding any distributions, subtracting the beginning NAV, and then dividing by the beginning NAV. Here, it's (($17.50 + $0.80) - $15) / $15 = $3.30 / $15 = 22%.

In January, 1992, the NAV for a Fund Was $15