77578 9781 Stephanie Chambers 59 PM CST eBook Chapter 13 Financial Planning Exer

Question

77578 9781 Stephanie Chambers 59 PM CST eBook Chapter 13 Financial Planning Exercise 11 Calculating and evaluating mutual fund returns Here is the per-shar e performance record of the Abacus Growth-and-Income fund for 2017 and 2016: 2017 2016 1. Net asset value, beginning of period: 2. Income from investment operations: 3. Net investment income 4. Net gains on securities (realized and unrealized) S. Total income from investment operations 6. Less distributions: 7. Dividends from net investment income 8. Distributions from realized gains 9. Total distributions 10. Net asset value, end of period: Use this information to find the rate of return earned on this fund in 2016 and in 2017. Round the answers to two deamal places. Do not round intermediate calculations. $54.65 $50.00 1.04 10.38 $0.70 9.50 $1142 $10.20 $0.47) ($0.32) (5.71(5.23) (5.55) (6.18) $59.89 $54.65 2016 2017

Explanation / Answer

2017

Rate of return= (Net income+Capital appreciation)/Net asset value at the beginning

                        = ($11.42-$6.18+$59.89-$54.65)/$54.65

                        = 19.18%

2016

Rate of return= (Net income+Capital appreciation)/Net asset value at the beginning

                        = ($10.20-$5.55+$54.65-$50)/$50

                        = 18.60%

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