Question

assume that one year ago you bought 140 shares of a mutual fund for $20 per share, you received a capital gain distribution of $0.65 per share during the past 12 months, and the market value of the fund is now $15, calculate the percentage of total return for your $2,800 investment. (negative amount should be indicated by a minus sign. do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

Answer 1

The initial investment was:

140 shares × $20/share = $2,800

The capital gain distribution received was:

140 shares × $0.65/share = $91

The current value of the investment is:

140 shares × $15/share = $2,100

The total return is the sum of the capital gain distribution and the change in value of the investment, divided by the initial investment, expressed as a percentage:

[($2,100 + $91) / $2,800 - 1] × 100% = - 5.11%

Therefore, the percentage of total return for the investment is -5.11%. Note that the negative sign indicates a loss.

Step-by-step explanation: