P12.1-A year ago, an investor bought 600 shares of a mutual fund at $8.65 per share. Over the past year, the fund has paid dividends of $0.81 per share and had a capital gains distribution of $0.73 per share.
a. Find the investor’s holding period return, given that this no-load fund now has a net asset value of $9.14.
b. Find the holding period return, assuming all the dividends and capital gains distributions are reinvested into additional shares of the fund at an average price of
$8.86 per share.
P12.2-A year ago, the Really Big Growth Fund was being quoted at an NAV of $22.49 and an offer price of $23.43 . Today, it’s being quoted at $24.37 (NAV) and $25.39 (offer). What is the holding period return on this load fund, given that it was purchased a year ago and that its dividends and capital gains distributions over the year have totaled $1.12 per share?
Assume that none of the dividends and capital gains distributions are reinvested into the fund. (Hint: You, as an investor, buy fund shares at the offer price and sell at the NAV.)
P12.13- You are considering the purchase of shares in a closed-end mutual fund. The NAV is equal to $22.54 and the latest close is $ 19.98 . Is this fund trading at a premium or a discount? How big is the premium or discount?