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Orlov [11]
3 years ago
8

A closed-end fund starts the year with a net asset value of $20. By year-end, NAV equals $20.90. At the beginning of the year, t

he fund is selling at a 4% premium to NAV. By the end of the year, the fund is selling at a 9% discount to NAV. The fund paid year-end distributions of income and capital gains of $2.30.
What is the rate of return to an investor in the fund during the year?
Business
1 answer:
Korvikt [17]3 years ago
4 0

Answer:

2.5%

Explanation:

Price at the beginning = NAV at the beginning × (1 + premium)

= 20 × 1.04 = 20.8

Price at the end = NAV at the end × (1 - premium)

= 20.90 × 0.91 = 19.019

NAV increase by $0.90 but price decrease by 1.781

Returns = (0.91 × 20.90 - 1.04 × 20 + 2.30) ÷ 1.04 × 20

= 0.519 ÷ 1.04 × 20

= 0.0249

= 2.49%

= 2.5%

OR

Returns = change in P + distribution / start of year P

= -1.781 + 2.30 / 1.04 × 20

= 0.519/20.8

= 0.0249

=2.49%

= 2.5%

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the first step is identify your choices

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2 years ago
Real GDP is the value of final goods and services produced in a year expressed in the prices of that same year. during a recessi
laila [671]

Answer:

The correct answer is: expressed in the prices of a base year.

Explanation:

Real GDP is an inflation-adjusted measure to calculate changes in economic output. It calculates the value of final goods and services produced in an economy in a year expressed in the prices of a base year.

Real GDP does not include changes in the price of products as it is calculated at constant prices.  

Nominal GDP, on the other hand, is calculated on the basis of current prices. It includes changes in prices and is not inflation-adjusted. That is why real GDP is preferred over nominal GDP.

6 0
2 years ago
The best way to limit competition is to: Choose one: A. control a resource that is essential in the production process. B. lobby
zloy xaker [14]

Answer:

A. control a resource that is essential in the production process.

Explanation:

When the crucial resource is required to make a product, then the restrictions on such resource would not allow, many people to enter in such business.

Also that the resources will be restricted in some or other manner, its price will increase accordingly the cost of producing such article would also increase.

As the cost of production will increase only producers with a high budget and resources in terms of finance will chose it.

5 0
3 years ago
Initially, suppose Bellissima uses 1 million hours of labor per week to produce corn and 3 million hours per week to produce jea
stiv31 [10]

Answer:

Bellisima's opportunity cost to produce 1 bushel of corn = 2 pairs of jeans

Explanation:

Bellisima uses 1 million hours of labor to produce corn and 3 million hours of labor to produce jeans. Produces 8 million bushels of corn and 48 million pairs of jeans.

  • Production of corn per million hours of labor = 8 / 1 = 8 bushels of corn
  • Production of jeans per million hours of labor = 48 / 3 = 16 pairs of jeans

Felicidad uses 3 million hours of labor to produce corn and 1 million hours of labor to produce jeans. Produces 15 million bushels of corn and 20 million pairs of jeans.

  • Production of corn per million hours of labor = 15 / 3 = 5 bushels of corn
  • Production of jeans per million hours of labor = 20 / 1 = 20 pairs of jeans

The opportunity cost refers to the extra costs or benefits lost form choosing one activity or investment over another alternative.

  • Bellisima's opportunity cost to produce 1 bushel of corn = 16 pairs of jeans / 8 bushels of corn = 2 pairs of jean per bushel of corn.
  • Bellisima's opportunity cost to produce 1 pair of jeans = 8 bushels of corn / 16 pairs of jeans = 0.5 bushels of corn per pair of jean.

  • Felicidad's opportunity cost to produce 1 bushel of corn = 20 pairs of jeans / 5 bushels of corn = 4 pairs of jean per bushel of corn.
  • Felicidad's opportunity cost to produce 1 pair of jeans = 5 bushels of corn / 20 pairs of jeans = 0.25 bushels of corn per pair of jean.

5 0
3 years ago
Llcrys Corp. writes 52 checks a day for an average amount of $461 each. These checks generally clear the bank 2.5 days after the
valentina_108 [34]

Answer:

$10,146

Explanation:

Llcrys Corp

Disbursment float = Checks ×average amount × numbers of clearing days

Disbursement float = 52× $461 × 2.5

Disbursement float = $59,930

Collection float = Checks ×average amount × numbers of average days

Collection float = 49 × $508× 2.00

Collection float = $49,784

Hence:

Disbursement float - Collection float

= $59,930 − $49,784

= $10,146

This is a DISBURSEMENT FLOAT of $10,146

7 0
3 years ago
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