sume that one year ago, you bought 130 shares of a mutual fund for $27 per share

Question

sume that one year ago, you bought 130 shares of a mutual fund for $27 per share and that you received an income dividend of $012 cents per share and a capital gain distribution of $0.22 cents per share during the past 12 months. Also assume the market value of the fund is now $24 a share. Calculate the percentage of total return for your $3,510 investment. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Percent of total return

Explanation / Answer

Buying price of per share of mutual fund = $27

Total shares purchased = 130

Total investment = $3510

Dividends recieved = $0.12 per share

Total dividends recieved = 0.12*130 = $15.6

Capital gain distribution is the payments made to shareholders by a fund manager in case he liquidate some of underlying asset or due to fixed income on mutual fund

Capital gain distribution per share = $0.22

Total capital gain distribution = 0.22 * 130 = $28.60

Current Price of stock = $24

Current Worth of initial investment becomes = 24*130 = $3,120

Total return = (Current worth of initial investment + Total dividends recieved + Total capital gain distribution - Initial investment) / (Initial investment) = (3120 + 15.6 + 28.6 - 3510) / 3510 = -0.0985

So total return = -9.85%

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