Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million shares at the start of the year and with $500 million in assets, 40 million in debt, and 18 million shares at the end of the year. During the year investors have received income distributions of $.50 per share and capital gain distributions of $.30 per share. If the total expense ratio is 0.75%, what is the rate of return on the fund?

1. 12.09%

2. 12.99%

3. 8.25%

D. The answer cannot be determined from the information given.