Question

 Hunter invested ​$4 comma 000 in shares of a load mutual fund. The load of the fund is 5 ​%. When Hunter purchased the​ shares, the NAV per share was ​$42 . A year​ later, Hunter sold the shares at a NAV of ​$41 per share. What is​ Hunter's return from selling his shares in the mutual​ fund? ​Hunter's return from selling his shares in the mutual fund is

Answer 1

Answer:

Investment = $4,000

Load of the fund = $4,000 * 5% = $200

Number of shares purchased = ($4,000 - $200) / $42 = 90.47619 units

A year​ later, Hunter sold the shares at a NAV of ​$41 per share

Sale Value = 90.47619 * $41 = $3,709.52

​Hunter's return from selling his shares in the mutual fund is = (Sale value - Investment) / Investment

= (3709.52 - 4000) / 4000

= -7.262%

Hunter's return from selling his shares in the mutual fund is = - 7.262% or -7.26%