Answer:
Rate of return to an investor in the Boomer Fund=7.8%
Explanation:
Given Data:
Fund started the year with a net asset value=$14.10
Net asset value at the end of year=$13.70
Distributions of income and Capital gain=$1.50
Required:
Rate of return to an investor in the Boomer Fund=?
Solution:
Rate of return=[tex]\frac{NVA_{end}-NVA_{start}+Capital\ gain\ and\ distribution}{NVA_{start}}[/tex]
[tex]Rate\ of\ return=\frac{\$13.70-\$14.10+\$1.50}{\$14.10}\\ Rate\ of\ return=0.078[/tex]
Rate of return to an investor in the Boomer Fund=7.8%
