Consider the following mutual fund statement.

Mutual fund statement

The fund reinvested both capital gains and dividends on the same date, yet the reinvestment cost per share is different for the dividends than it is for the capital gains.

Since both the shares reinvested and the cost are both at three decimal places, I find the argument for the need to price to the nearest penny dubious.

Why is this?

1 Answer 1


You can see the shares are to 3 digits beyond decimal, but the dollars go out 4, or 1/100 cent. Shares accurate to 1/1000 means it's priced to 1 cent per 100,000 whole shares. You ask why the price is off. I suspect a rounding artefact created by the effect of the shares and dollars invested being divided back to an exact share price.

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