At the Beginning of the Year,you Invested $7,500 in a No-Load

question 7

Multiple Choice

At the beginning of the year,you invested $7,500 in a no-load mutual fund with a NAV of $30.00.At the end of the year,the fund distributed $1.05 per share in short-term earnings and $3.00 per share in long-term earnings.The end of year NAV was $24.75.What was your annual rate of return on this investment?

• A) -4.00 percent
• B) -1.96 percent
• C) 10.80 percent
• D) 14.20 percent
• E) 16.90 percent

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Definitions:

Barrier to Entry

Factors that prevent or hinder companies from entering into a specific market or industry.

Allocative Efficiency

A state of resource allocation where every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it.

Market Power

The ability of a firm or group of firms to manipulate the price or supply of a good or service in the market, often by limiting availability or by altering consumer demand through control of significant portions of the market.

Cartels

associations of independent businesses formed to control production, pricing, and marketing to monopolize a market or restrict competition.