Question
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.
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