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Hunter invested $7,000
Hunter invested $7,000.00 in shares of a load mutual fund. The load of the fund is 7%. When Hunter purchased the shares, the NAV per share was $70.00. A year later, Hunter sold the shares at a NAV of $68.00 per share. What is Hunter´s return from selling his shares in the mutual fund?
Expert Solution
Computation of Hunter´s return from selling his shares in the mutual fund:
Given,
Hunter Invested $7,000 in the Mutual fund with a load of 7% at a NAV per share of $70.
So,
He would have got (7,000*(1-7%))/$70 = $6510/$70 = 93 shares
Later he sold the shares at a NAV per share of $68
So,
Amount He got by selling the shares = 93*$68 = $6,324
Return on Mutual Funds = (Amount got by sale - Amount invested)/Amount invested * 100
= (6324-7000)/7000 * 100
Return on Mutual Funds = - 9.66%
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