Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that one year ago, Samuel bought 1,500 shares of BIS Mutual Fund for $18 per share. Samuel received an income dividend of $0.60 per

Suppose that one year ago, Samuel bought 1,500 shares of BIS Mutual Fund for $18 per share. Samuel received an income dividend of $0.60 per share and a capital gain distribution of $0.90 per share during the past 12 months. The market value of the BIS Mutual Fund is now $17.50 a share. Calculate the rate of return for Samuels investment if he decides to sell BIS Mutual Fund now. Show all your calculations. 4 marks c. Paul has $60,000 to invest and he is considering investing in F&B mutual fund, The F&B mutual fund includes an initial sales charge of 5.50%; 1.75% management fee; and a 0.75% 12b-1 fee. The 5.50% initial sales charge is deducted from the original funds invested whilst the 1.75% management fee and the 0.75% 12b-1 fee are charged on the funds end-of-year net asset value recorded on the book. Assume that the F&B mutual funds gross rate of return was 12.50% per year. What should Pauls investment be worth in one year? Show all your calculations.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Information Quality Assurance And Internal Control For Management Decision Making

Authors: William R Kinney

1st Edition

0256221618, 9780256221619

More Books

Students also viewed these Finance questions