Answer:
4.23%
Explanation:
For computing the rate of return on the fund, we need to do following calculations
1. The fund after deducting the front-end load is
= $21,600 - $21,600 × 4%
= $21,600 - $864
= $20,736
2. Now number of bought is
= $20,736 ÷ $18 per share
= $1,152
3. The closed NAV is
= $18 + $18 × 10%
= $18 + $.8
= $19.8
4. So, the end year asset value is
= Closed NAV × number of shares bought
= $19.8 × 1,152
= $22,809.60
5. Now the year end investment value after considering the expense ratio is
= $22,809.60 × (1 - 1.3%)
= $22,513.0752
6. Now the rate of the return is
= ($22,513.0752 - $21,600) ÷ ($21,600)
= 4.23%
Answer:
I think distrubustion changes
Explanation:
Sorry if wrong
Answer:
Rate of return = 10.5%
Explanation:
Rate of return would be the proportion of the amount invested that is earned as profit. Kindly note the the following :
The amount earned as cash return would be determined as the capital gains less the interest on the loan.
Also, the amount invested would refer to the personal capital contribution made by the investor. This implies the total cost of the stock less the interest earned on the amount borrowed.
The principles above are illustrated as follows:
Capital gain on stock = stock price at the end - stock price at the beginning
units of stock purchased = 4000/20 = 200
Stock price at the end= 109% × 20 = 21.8
Capital gain = (21.8 - 20) × 200 = 360
Cost of fund = interest rate × amount borrowed
Amount borrowed = 2000
Cost of fund= 7.5% × 2000 = 150
Rate of Return = Capital gains - cost of funds /(Total cost - amount borrowed)
Rate of return= (360 - 150)/(4000-2000)× 100 = 10.5%
Rate of return = 10.5%
Answer: c. reserves; excess reserves; increase
Explanation: The reserve ratio (cash reserve ratio) is determined by a country's central bank (Federal Reserve in this case) as an important monetary policy tool to increase or decrease the economy's money supply. As such, it is the percentage of a bank's deposits that it must keep in cash as a reserve rather than invest with or lend out.
The reserves in the banking system would remain unchanged when the Fed lowers the required reserve ratio. However, the excess reserve (funds that a bank keeps back beyond what is required by regulation) would rise that would in most instances, lead to an increase in the money supply (due to increases in new loans and checkable deposits).