# Question

An investor buys 100 shares in a mutual fund on January 1, 2015, for $50 each. The fund earns dividends of $2 and $3 per share during 2015 and 2016. These are reinvested in the fund. The fund’s realized capital gains in 2015 and 2016 are $5 per share and $3 per share, respectively. The investor sells the shares in the fund during 2017 for $59 per share. Explain how the investor is taxed.

## Answer to relevant Questions

Good years are followed by equally bad years for a mutual fund. It earns +8%, –8%, +12%, –12% in successive years. What is the investor’s overall return for the four years? The price of gold is currently $1,500 per ounce. The forward price for delivery in one year is $1,700. An arbitrageur can borrow money at 10% per annum. What should the arbitrageur do? Assume that the cost of storing gold is ...A binary option pays off $500 if a stock price is greater than $60 in three months. The current stock price is $61 and its volatility is 20%. The risk-free rate is 2% and the expected return on the stock is 8%. What is the ...When the partial durations are as in Table 9.5, estimate the effect of a shift in the yield curve where the ten-year rate stays the same, the one-year rate moves up by 9e, and the movements in intermediate rates are ...The probability density function for an exponential distribution is e−x where x is the value of the variable and is a parameter. The cumulative probability distribution is 1− e−x. Suppose that two ...Post your question

0