Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You invested $119.00 in a mutual fund exactly 4 years ago. In year 1, you earned capital gains of $4.50 and the fund paid you

image text in transcribed
You invested $119.00 in a mutual fund exactly 4 years ago. In year 1, you earned capital gains of $4.50 and the fund paid you $.95 in dividends at the end of the year. In year 2 , the fund price fell by 26.00% and no dividends were paid. In year 3 , the fund's price rose by 13.00% and you were also paid a $2.20 dividend at the end of the year. This year, the fund price fell by 5% and no dividend was paid. Assuming you reinvested your dividends immediately in the fund (such that the fund's returns and value each year includes the dividends) what is your annual geometric average rate of return for the 4-year period? The annual geometric average rate of return is 2.76%. The annual geometric average rate of return is 4.03%. The annual geometric average rate of return is 3.55%. The annual geometric average rate of return is 3.36%

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

Marketplace Lending Financial Analysis And The Future Of Credit Integration Profitability And Risk Management

Authors: Ioannis Akkizidis, Manuel Stagars

1st Edition

1119099161, 978-1119099161

More Books

Students also viewed these Finance questions