Question

In: Finance

A closed-end fund starts the year with a NAV of $12.55. By year-end, NAV equals $11.36....

A closed-end fund starts the year with a NAV of $12.55. By year-end, NAV equals $11.36. At the beginning of the year, the fund was selling at a 5% discount to NAV. By the end of the year, the fund is selling at a 1% premium to NAV. The fund paid year-end distributions of income and capital gains of $1.21. What is the rate of return to an investor in the fund during the year?

Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.

Solutions

Expert Solution

P0 = NAV0 * (1 - Discount) = $12.55 * 0.95 = $11.9225

P1 = NAV1 * (1 + Premium) = $11.36 * 1.01 = $11.4736

The NAV decreased by $1.19 but the price of the fund decreased by $0.4489

Return = [(P1 + Distributions)/P0] – 1

Return = [($11.4736 + $1.21)/$11.9225] - 1

Return = 0.0638

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

A closed-end fund starts the year with a net asset value of $30. By year-end, NAV...
A closed-end fund starts the year with a net asset value of $30. By year-end, NAV equals $31.90. At the beginning of the year, the fund is selling at a 2% premium to NAV. By the end of the year, the fund is selling at a 7% discount to NAV. The fund paid year-end distributions of income and capital gains of $3.30. a. What is the rate of return to an investor in the fund during the year? (Do not...
A closed-end fund starts the year with a net asset value of $22. By year-end, NAV...
A closed-end fund starts the year with a net asset value of $22. By year-end, NAV equals $23.10. At the beginning of the year, the fund is selling at a 3% premium to NAV. By the end of the year, the fund is selling at a 8% discount to NAV. The fund paid year-end distributions of income and capital gains of $2.50. a. What is the rate of return to an investor in the fund during the year? (Do not...
A closed-end fund starts the year with a net asset value of $21 . by year-end...
A closed-end fund starts the year with a net asset value of $21 . by year-end , NAV equals $20.5 . At the beginning of the year , the fund is selling at a 3% premium to NAV. By the end of the year, the fund is selling at a 4% discount to NAV . the fund paid year-end distributions of income and capital gains of 2.50$ . what is the rate of return to an investor in the fund...
One year ago, the Tyler Rose closed-end fund had a NAV of $35.19 and was selling...
One year ago, the Tyler Rose closed-end fund had a NAV of $35.19 and was selling at an 11% discount. Today, the fund has a NAV of $36.42 and is selling at a 7.5% premium. During the year, the fund paid a dividend distribution of $.48 and a capital gain distribution of $.97. A. Calculate the NAV-based HPR for the fund for the year. B. Calculate the market-based HPR for the fund for the year. C. Recalculate the market-based HPR...
One year ago, the Tyler Rose closed-end fund had a NAV of $35.19 and was selling...
One year ago, the Tyler Rose closed-end fund had a NAV of $35.19 and was selling at an 11% discount. Today, the fund has a NAV of $36.42 and is selling at a 7.5% premium. During the year, the fund paid a dividend distribution of $.48 and a capital gain distribution of $.97. A. Calculate the NAV-based HPR for the fund for the year. B. Calculate the market-based HPR for the fund for the year. C. Recalculate the market-based HPR...
One year ago, Super Star Closed-End Fund had a NAV of $10.23 and was selling at...
One year ago, Super Star Closed-End Fund had a NAV of $10.23 and was selling at a(n) 15% discount. Today, its NAV is $11.72 and it is priced at a(n) 6% premium. During the year, Super Star paid dividends of $0.4 and had a capital gains distribution of $0.93. On the basis of the above information, calculate each of the following a. Super Star's NAV-based holding period return for the year. b. Super Star's market-based holding period return for the...
One year​ ago, Super Star​ Closed-End Fund had a NAV of ​$10.25and was selling at​ a(n)...
One year​ ago, Super Star​ Closed-End Fund had a NAV of ​$10.25and was selling at​ a(n) 19 %discount.​ Today, its NAV is $ 11.68 and it is priced at​ a(n) 3 %premium. During the​ year, Super Star paid dividends of ​$0.42and had a capital gains distribution of  $0.93On the basis of the above​ information, calculate each of the following. a. Super​ Star's NAV-based holding period return for the year. b. Super​ Star's market-based holding period return for the year.___% Did the...
A closed-end fund’s NAV is $78 at the beginning of the year and $84 at the...
A closed-end fund’s NAV is $78 at the beginning of the year and $84 at the end of the year. At the beginning of the year the fund was selling at a 2% premium to NAV, at the end of the year it was selling at a 2% discount to NAV. The fund paid year-end distributions of income and capital gains of $1. What is the rate of the return to an investor, who bought the fund at the beginning...
A closed-end fund’s NAV is $25 at the beginning of the year and $39 at the...
A closed-end fund’s NAV is $25 at the beginning of the year and $39 at the end of the year. At the beginning of the year the fund was selling at a 3% premium to NAV, at the end of the year it was selling at a 2% discount to NAV. The fund paid year-end distributions of income and capital gains of $1. What is the rate of the return to an investor, who bought the fund at the beginning...
Last year, you invested $90,000 into Jones mutual fund. The fund had a NAV of $45...
Last year, you invested $90,000 into Jones mutual fund. The fund had a NAV of $45 when you opened your account. Jones fund charges a 3% front end load and a 2% back end load. During the course of the year, the fund paid $5/share in distributions, which you fully reinvested in the fund by purchasing new shares at a price of $44/share. The fund currently has a NAV of $48. How many shares did you buy when you opened...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT