calculate the return on investment for 1,800 shares of a mutual - fund purchased with an offer price of…

calculate the return on investment for 1,800 shares of a mutual - fund purchased with an offer price of $15.82 if the shares were sold with a nav of $18.27. the shares paid a dividend of $0.79 per share during ownership.\nthe return on investment is (%).\n(round to two decimal places as needed.)

calculate the return on investment for 1,800 shares of a mutual - fund purchased with an offer price of $15.82 if the shares were sold with a nav of $18.27. the shares paid a dividend of $0.79 per share during ownership.\nthe return on investment is (%).\n(round to two decimal places as needed.)

Answer

Explanation:

Step1: Calculate total initial investment

The initial price per - share is $15.82$ and the number of shares is $1800$. So the total initial investment $I$ is the product of the number of shares and the initial price per - share. $I = 1800\times15.82=1800\times\frac{1582}{100}=18\times1582 = 28476$

Step2: Calculate total proceeds from selling

The selling price per - share (NAV) is $18.27$ and the number of shares is $1800$. So the total selling price $S$ is the product of the number of shares and the selling price per - share. $S = 1800\times18.27=1800\times\frac{1827}{100}=18\times1827 = 32886$

Step3: Calculate total dividends received

The dividend per - share is $0.79$ and the number of shares is $1800$. So the total dividends $D$ is the product of the number of shares and the dividend per - share. $D=1800\times0.79 = 1800\times\frac{79}{100}=18\times79 = 1422$

Step4: Calculate total return

The total return $R$ is the sum of the capital gain (the difference between the selling price and the initial investment) and the dividends received. The capital gain $CG=S - I=32886−28476 = 4410$ The total return $R=CG + D=4410+1422 = 5832$

Step5: Calculate the return on investment (ROI)

The formula for ROI is $\text{ROI}=\frac{R}{I}\times100%$. $\text{ROI}=\frac{5832}{28476}\times100%$ $\text{ROI}=\frac{583200}{28476}% \approx 20.48%$

Answer:

$20.48$