The Profitability Fund Had NAV Per Share of $17

question 69

Multiple Choice

The Profitability Fund had NAV per share of $17.50 on January 1,2001.On December 31 of the same year the fund's NAV was $19.47.Income distributions were $0.75 and the fund had capital gain distributions of $1.00.Without considering taxes and transactions costs,what rate of return did an investor receive on the Profitability fund last year?

• A) 11.26%
• B) 15.54%
• C) 16.97%
• D) 21.26%
• E) 9.83%

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Definitions:

Payback Period

The time required for the return on an investment to "pay back" the sum of the original investment, commonly used as a measure of investment risk.

Profile

A description or analysis of the characteristics, qualities, or activities of a person, organization, or thing.

Net Present Value

A financial metric that calculates the present value of all cash inflows and outflows of a project or investment, using a specific discount rate.

Internal Rate

Commonly signifies the internal rate of return (IRR), identified as the discount rate that sets the net present value (NPV) of all cash flows pertaining to a specific project at zero.