Business, 02.03.2020 23:54, copperrock15

You pay $21,600 to the Laramie Fund, which has a NAV of $18 per share at the beginning of the year. The fund deducted a front-end load of 4%. The securities in the fund increased in value by 10% during the year. The fund's expense ratio is 1.3% and is deducted from year-end asset values. What is your rate of return on the fund if you sell your shares at the end of the year?

Answers: 1

Show answers

Answers

The rate of return is the percentage that is charged over the invested amount by the investor. It is the interest rate at which the investor will gain returns over the funds invested at the end of each period or as per the return payment period decided.

The rate of return on the fund when the shares are sold at the end of the year is 4.23%.

Computation:

Given:

Fund invested or principle amount =$21,600

NAV at beginning =$18 per share

Front-end load =4%

Fund expense ratio =1.3%

% increase in the value of fund =10%

1. Computation of available funds:

$\text{Available Fund}=\text{Investment}\times(1-\text{Front end load})\\=\$21,600\times(1-0.04)\\=\$21,600\times0.06\\=\$20,736$

2. Computation of number of shares:

$\text{Number of Shares}=\dfrac{\text{Available fund}}{\text{NAV}}\\=\dfrac{\$20,736}{\$18}\\=1,152\;\text{shares}$

3. Computation of NAV at the year-end:

$\text{NAV at end}=\text{NAV at beginning}\times(1+\text{growth rate})\\=\$18\times(1+0.10)\\=\$18\times1.10\\=\$19.80$

4. Computation of ending asset value:

$\text{Year-end asset value}=\text{NAV at end}\times\text{Number of shares}\\=\$19.80\times1,152\\=\$22,809.60$

5. Computation of ending investment:

$\text{Ending Investment}=\text{Year-end asset value}\times(1-\text{fund expense ratio})\\=\$22,809.60\times(1-0.013)\\=\$22,513.08$

6. Computation of interest rate of return:

$\text{Rate of return}=\dfrac{\text{Ending investment-Beginning Investment}}{\text{Beginning Investment}}\\=\dfrac{\$22,513.08-\$21,600}{\$21,600}\\=0.0423\;\text{or}\;4.23\%$

To know more about the rate of return, refer to the link:

link

answered: Ancelingabaut

4.23%

Explanation:

Given

Investment = $21,600

Front-end load = 4%

Rate of return is calculated by:

End investment - Beginning investment/ Beginning investment

First we calculate the available fund.

This is calculated as:

Available fund= Investment x (1- Front-end load %)

Available Fund = $21,600 x (1 - 4%)

Available Fund = $21,600 * (1 - 0.04)

Available Fund = $20,736

Then we Calculate the number of shares.

This is given by;

Shares= Available Fund/NAV

Where NAV = $18 Per share

Shares =$20,736/$18 per share

Shares = 1,152 shares

The NAV end is then calculated.

This is calculated by;

NAV End =NAV Begining * (1+ Growth rate)

NAV End =$18 *(1+.10)

NAV End = $18 * 1.10

NAV End =$19.80

The Year end asset value is then calculated by

Assets Value = NAV end * number of shares

Assets Value =$19.80 x 1,152

Assets Value = $22,809.60

The end investment is also calculated by;.

End investment=year end asset value x (1- expense ratio)

End Investment =$22,809.60 x (1-.013)

End Investment =$22,513.08

Lastly, End investment - Beginning investment/ Beginning investment

=(22,513.08-21,600)/21,600

=0.0423

= 4.23%

answered: Guest

answer'; i believe the correct answer is (15,000) workers a year are treated for injuries caused by jacks, lifts or jack stands;

answered: Guest

the answer is . a novel has no sub-plot, but a novella does

Other questions on the subject: Business

Business, 21.06.2019 21:00, ariannapenny98

Which of the following is not a personality trait? sincerity word processing punctuality laziness

Answers: 1

continue

Business, 21.06.2019 22:20, kyla1220

Suppose a ceiling fan manufacturer has the total cost function c(x) = 48x + 1485 and the total revenue function r(x) = 75x. (a) what is the equation of the profit function p(x) for this commodity? p(x) = (b) what is the profit on 35 units? p(35) = interpret your result. the total costs are less than the revenue. the total costs are more than the revenue. the total costs are exactly the same as the revenue. (c) how many fans must be sold to avoid losing money? fans

Answers: 1

continue

Business, 21.06.2019 22:30, petunia6548

True or false: banks are required to make electronically deposited funds available on the same day of the deposit

Answers: 2

continue

Business, 23.06.2019 02:40, frankierice020

Sean lives in dallas and runs a business that sells boats. in an average year, he receives $722,000 from selling boats. of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. he owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. assume that the value of this showroom does not depreciate over the year. also, if sean does not operate this boat business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. no other costs are incurred in running this boat business. identify each of sean's costs in the following table as either an implicit cost or an explicit cost of selling boats. implicit costexplicit costthe wages and utility bills that sean pays the rental income sean could receive if he chose to rent out his showroom the salary sean could earn if he worked as a paralegal the wholesale cost for the boats that sean pays the

Answers: 2

continue

Do you know the correct answer?

You pay $21,600 to the Laramie Fund, which has a NAV of $18 per share at the beginning of the year....