Question

You purchased shares of a mutual fund at a price of $27 per share at the beginning of the year and paid a front-end load of 1.2%. If the securities in which the fund invested increased in value by 12.9% during the year, and the fund's expense ratio was 2.6%, your return if you sold the fund at the end of the year would be ____________%.

Select one:

a. 12.9

b. -3.8

c. 11.5

d. 10.3

e. 9.0

Answer 1

Given,

Beginning of the year value = $ 27

Front-end load = 1.2%

Increase rate = 12.9%

Expense ratio = 2.6%

Solution :-

retran In Shouaing Statement clollars Begimning of the year Value 0.334) Less Front -erd load 36.676 $3.441204 Addl mcrease in Value 26. 676 x 13.9) $0.693576) Less Fund's expense R6.676 x 2.6%) Valuc २१.५२36 २४ End ot the year less beginning of the yer Value 21 २.५२ 36२४ Retuan (in dollars)

Now Retuan (in Return in dollars) Beginning of the X loo Value Year $2.4236 38 437 loo .98 7 8.9764 %