# Twelve months ago, you purchased the shares of a no-load mutual fund for \$22.25 per share....

Twelve months ago, you purchased the shares of a no-load mutual fund for \$22.25 per share. The fund distributed cash dividends of \$0.60 and capital gains of \$1.60 per share. If the net asset value of the fund is currently \$24.45, what was your annual return on the investment? Round your answer to two decimal places If the value of the shares had been \$21.18, what would have been your annual return? Round your answer to two decimal places.

Annual Return on Investment = (Dividend distribution + Capital gains distribution + Change in net asset value) / Beginning Net Asset Value

Where Change in net asset value = Ending Net Asset Value - Beginning Net Asset Value

Dividend distribution = \$0.60

Capital gains distribution = \$1.60

Beginning Net Asset Value = \$22.25

Ending Net Asset Value = \$24.45

Change in net asset value = \$24.45 - \$22.25

= \$2.20

Therefore Annual Return on Investment =  (\$0.60 + \$1.60 + \$2.20) / \$22.25

= 4.40 / 22.25

= 0.1978 or

19.78 % (Rounded two decimal places)

Dividend distribution = \$0.60

Capital gains distribution = \$1.60

Beginning Net Asset Value = \$22.25

Ending Net Asset Value = \$21.18

Change in net asset value = \$21.18 - \$22.25

= - \$1.07

Therefore Annual Return on Investment =  (\$0.60 + \$1.60 + (- \$1.07) / \$22.25

= 1.13 / 22.25

= 0.0508 or

5.08 % (Rounded two decimal places)

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