Suppose that at the start of the year, a no-load mutual fund has a net asset value of $27.15 per share. During the year, it pays its shareholders a capital gain and dividend distribution of $1.12 per share and finishes the year with an NAV of $30.34.

a. What is the return to an investor who holds 257.876 shares of this fund in his (non-taxable) retirement account?

b. What is the after-tax return for the same investor if these shares were held in an ordinary savings account? Assume that the investor is in the 30 percent tax bracket.