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About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $24.50 a share, and it
About a year ago, Eric Robertson bought some shares in the Diamond Mountain Mutual Fund. He bought the fund at $24.50 a share, and it now trades at $26.00. Last year, the fund paid dividends of $0.40 a share and had capital gains distributions of $1.83 a share. Assume that the mutual fund distributed the dividends and capital gains at the end of the year. Using the approximate yield formula, what rate of return did Eric earn on his investment? Round the answer to two decimal places. % Repeat the calculation using a handheld financial calculator. Round the answer to two decimal places. % What rate of return would he have earned if the stock had risen to $30 a share? Round the answer to two decimal places. %
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