What Would Be the Return on a $1,000 Investment in a Mutual

question 24

Essay

What would be the return on a $1,000 investment in a mutual fund whose NAV is $20? The fund has a 3 percent front-end load and during the holding period,$400 of fund distributions are reinvested at a NAV of $25 (no load applied to reinvestments).The fund is ultimately sold at a NAV of $24.(Round to the nearest tenth of a percent.)
(a)14.8 percent
(b)10.5 percent
(c)15.3 percent
(d)10.8 percent

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Definitions:

Labor Productivity Growth

An increase in the output of goods and services per hour worked, which can lead to higher living standards and economic growth.

Real Wage

The purchasing power of wages, taking into account the impact of inflation, indicating how many goods and services wages can buy.

Nominal Wage

The wage or salary that is paid to workers in current dollars, without adjusting for inflation or purchasing power.

General Price Level

An indicator of the average prices of goods and services throughout an economy over a period of time, often used to measure inflation.