Question: Distributions From Mutual Funds (9 Marks) Peter has bought 1,000 units in each of the following funds at the beginning of this year. Each of
Distributions From Mutual Funds (9 Marks)
Peter has bought 1,000 units in each of the following funds at the beginning of this year. Each of the funds performed well during the year and posted the following NAVPUs on December 14/21:
| Date: December 14/21 | Number of Units | Price | Value |
| IFSE Bond Fund | 1,000 | $11.50 | $11,500 |
| IFSE Balanced Fund | 1,000 | $18.75 | $18,750 |
| IFSE Global Growth Fund | 1,000 | $27.69 | $27,690 |
| Total |
|
| $57,940 |
On December 15th, 2021, each of the funds declared the following distributions:
| December 15, 2021 | Distribution per unit |
| IFSE Bond Fund | $1 |
| IFSE Balanced Fund | $2 |
| IFSE Global Growth Fund | $3 |
Peter decided to re-invest the distributions of the Bond Fund and the Balanced Fund, but decided to take distribution in cash on his Global Growth Fund.
REQUIRED:
- Calculate how much investment income will be distributed to Peter from each investment on December 15th. (3 Marks)
- Calculate the NAVPU for each holding AFTER the distribution. (3 Marks)
- Would there be a difference in the tax payable if Peter would have decided to reinvest all of the distributions rather than take cash? Please explain your answer. (3 Marks)
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