At the Beginning of the Year,you Invested $5,000 in a No-Load

question 31

Multiple Choice

At the beginning of the year,you invested $5,000 in a no-load mutual fund with a NAV of $25.00.At the end of the year,the fund distributed $1.10 per share in short-term earnings and $3.10 per share in long-term earnings.The end of year NAV was $24.60.What was your annual rate of return on this investment?

• A) -5.90 percent
• B) -1.86 percent
• C) 11.80 percent
• D) 15.20 percent
• E) 17.90 percent

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Definitions:

Operating Cash Inflow

Cash generated from the core business operations of a company during a specific period.

Straight-Line Depreciation

An approach to evenly spread the expense of an asset over its period of utility.

Working Capital

The gap between a firm's present assets and liabilities, showing its operational efficiency and ability to cover short-term obligations.

Operating Cash Inflow

Cash generated from a company's normal business operations.