Question: please explain how you arrive to answer, thank you A closed-end fund starts the year with a net asset value of $21. By year-end, NAV

please explain how you arrive to answer, thank you

A closed-end fund starts the year with a net asset value of $21. By year-end, NAV equals $22.00. At the beginning of the year, the fund is selling at a 2% premium to NAV. By the end of the year, the fund is selling at a 7% discount to NAV. The fund paid year-end distributions of income and capital gains of $2.40. Required: a. What is the rate of return to an investor in the fund during the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What would have been the rate of return to an investor who held the some securities as the fund manager during the year? (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Harding Plastic Molding Company On January 11, 2003, the finance committee of Harding Plastic Molding Company (HPMC) met to consider eight capital budgeting projects. Present at the meeting were...

Need answer for A A closed-end fund starts the year with a net asset value of $17.00. By year-end, NAV equals $17.30. At the beginning of the year, the fund was selling at a 1.5% premium to NAV. By...

May I know why the answer will use (NAV) instead of the market price to calculate the rate of return? I thought closed end fund could be traded in market and therefore there will be discount or...

INVESTMENT QUESTIONS 1. Suppose your expectations regarding the stock price are as follows: State of the Market Probability Ending Price HPR (including dividends) Boom 0.22 $140 49.5% Normal growth...

Can you explain briefly the answer of point a? How we get the Number 0.93 and 1.2? Corporate Fund started the year with a net asset value of $12.50. By year-end, its NAV equaled $12.10. The fund paid...

Open-end equity mutual funds find it necessary to keep a significant percentage of total invest- ments, typically around 5% of the portfolio, in very liquid money market assets. Closed-end funds do...

Part A Required: An open-end fund has a net asset value of $10.70 per share. It is sold with a front-end load of 6%. What is the offering price? (Round your answer to 2 decimal places.) Part B...

Use these Calculations to answer the question below: As the price of a close-end fund may deviate from its NAV, we instead use the price of the net asset value when we calculate the rate of return:...

A closed - end fund starts the year with a net asset value of $ 1 4 . By year - end, NAV equals $ 1 4 . 3 0 . At the beginning of the year, the fund is selling at a 4 % premium to NAV. By the end of...

10. Reconsider the Fingroup Fund in the previous problem. If during the year the portfolio manager sells all of the holdings of stock D and replaces it with 200,000 shares of stock E at $50 per share...

Clegg, Inc. manufactures door panels. Suppose Clegg is considering spending the following amounts on a new total quality management (TQM) program: Strength-testing one item from each batch of...

The depreciation method that does not initially use the residual value in depreciation calculations is the A. direct method. B. units-of-production method. C. double-declining balance method. D....

Lixin is standing 7.05 m away from the statue of the Merlion MP at Merlion Park, Singapore. The height of her eyes from her feet is 1.55 m. Given that the angle of elevation of the top of the statue...

John Prado and Ayana Nicks formed a partnership, dividing income as follows: 1. Annual salary allowance to Prado, $10,000 and Nicks, $28,000. 2. Interest of 5% on each partner's capital balance on...

1. What does Rawls mean when he states that justice is the first virtue of social institutions? 2. How does he describe what he calls the original position and the veil of ignorance, from behind...

The current one-year T-bill rate is 40 percent and the expected one-year rate 12 months from now is 1.10 percent. According to the unbiased expectations theory, what should be the current rate for a...

Catrina Santana contributed a patent, accounts receivable, and $23,000 cash to a partnership. The patent had a book value of $8,000. However, the technology covered by the patent appeared to have...

A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts as of January 1, 2018: Assets . . . . . . . . . . . . $320,000 Liabilities . . . . . . . . . ....

------------------------------------- At the beginning of its first year of operations, Bonita Limited has 4,900, $3 preferred shares and 48,000 common shares. Using the format shown below, allocate...

Describe five organizational development techniques.

Explain the two dimensions of an organizations culture.

State why people resist change and how to overcome resistance.