Consider a No-Load Mutual Fund with $400 Million in Assets

Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million shares at the start of the year and with $500 million in assets, 40 million in debt, and 18 million shares at the end of the year. During the year investors have received income distributions of $.50 per share and capital gain distributions of $.30 per share. If the total expense ratio is .75%, what is the rate of return on the fund?

A) 12.09%
B) 12.99%
C) 8.25%
D) The answer cannot be determined from the information given.

Correct Answer:

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