Suppose that an open-end mutual fund has NAV of Rs. 15 and the offering price of the shares is Rs. 16. The investor purchased 100 shares of this…
BBS Fundamentals of Investment · 2077 · Solved Question with Answer
Suppose that an open-end mutual fund has NAV of Rs. 15 and the offering price of the shares is Rs. 16. The investor purchased 100 shares of this mutual fund. At the end of year one, the investor receives Rs. 2 per share in cash dividends and capital gain distributions and sells the shares at a NAV of Rs. 18.
b. Assuming that there is no load fee, what is the HPR on this fund?
c. Calculate holding period return, assuming all the dividends and capital gains distributions are reinvested into additional shares of the fund at an average price of Rs. 16 per share