Question

You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 6.0%. If the securities in which the fund invested increased in value by 10% during the year, and the fund's expense ratio was 1.5%, your return if you sold the fund at the end of the year would be

Answer 1

Answer:

1.99%

Explanation:

Calculation for your return if you sold the fund at the end of the year

Return={[$20 * (100%-6%) * (1.10 - .015)] -$20}/$20

Return={[$20 * .94 * (1.10 - .015)] -$20}/$20

Return = 1.99%

Therefore your return if you sold the fund at the end of the year would be 1.99%