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Finra Exam Series-6 Topic 5 Question 85 Discussion

Actual exam question for Finra's Series-6 exam
Question #: 85
Topic #: 5
[All Series-6 Questions]

Doc purchased shares of the MedTech Fund at its net asset value of $9.66 a share at the beginning of the year. The fund distributed dividends of $0.12 a share and capital gains of $0.10 a share during the year.

The net asset value at the end of the year was $12.00. The fund's total return was:

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Suggested Answer: B

The fund's beginning NAV was $9.66, its ending NAV was $12.00, and its distributions during the year totaled $0.22 a share, so the total return on the MedTech Fund over this period was 26.5%. Total return can be calculated as:

[(ending NAV + distributions) - beginning NAV]/beginning NAV = [($12.00 + $0.22) -$9.66]/$9.66 = 26.5%.


by Lauran at Aug 25, 2024, 09:32 PM

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Eva
2 months ago
This is an easy one! The fund made a killing this year. B) 26.5% all the way. (Though I wish I had invested in it earlier!)
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Pearline
2 months ago
A) 21.3% is tempting, but it doesn't account for the dividends and capital gains. I'll have to go with B) 26.5%.
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Iesha
1 months ago
Exactly, that's why B) 26.5% is the most accurate choice in this scenario.
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Nikita
1 months ago
So, the net asset value at the end of the year plus the distributions divided by the initial net asset value gives us the total return.
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Amos
1 months ago
I agree, the total return should include all the distributions made by the fund.
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Arlean
2 months ago
I think B) 26.5% is the correct answer because it takes into account the dividends and capital gains.
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Ashlee
2 months ago
I calculated it too, and I also got B) 26.5% as the total return.
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Andrew
2 months ago
I agree with Willie, the capital gains and dividends increase the total return.
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Kasandra
2 months ago
D) 10.1% seems too low. The net asset value increase alone would be more than that. I'll go with C) 25.5%.
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Phil
2 months ago
I think the answer is B) 26.5%. The increase in net asset value plus the dividends and capital gains add up to a 26.5% return.
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Bettyann
2 months ago
User2
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Genevieve
2 months ago
User1
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Willie
3 months ago
I think the answer is B) 26.5%.
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