The rate of return on the fund when shares are sold at the end of the year. Introduction: Fund’s-Expense ratio: It is a ratio depicting the funds to be spent on the expenses related to the usage and maintenance of assets. For example, assume expense ratio to be 1%, then every year 1% of the total assets fund will be utilized towards expenses incurred. Rate of return: An investor invests the money only after he/she is certain that there will be a income on that investment. When an annual income is provided to the investor and is depicted in the form of percentages or proportion of the actual investment, it is termed as rate of interest.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 18PS

Summary Introduction

To calculate: The rate of return on the fund when shares are sold at the end of the year.

Introduction:

Fund’s-Expense ratio: It is a ratio depicting the funds to be spent on the expenses related to the usage and maintenance of assets. For example, assume expense ratio to be 1%, then every year 1% of the total assets fund will be utilized towards expenses incurred.

Rate of return: An investor invests the money only after he/she is certain that there will be a income on that investment. When an annual income is provided to the investor and is depicted in the form of percentages or proportion of the actual investment, it is termed as rate of interest.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

You purchased 1,000 shares of the New fund at a price of GHS20 per share at the beginning of the year. You paid front-end load of 4%. The securities in which the fund invests increase in value by 12% during the year. The fund’s expense ratio is 1.2%. What is your rate of return on the fund if you sell your shares at the end of the year?

You purchased 1,000 shares of a fund at a price of $20 per share at the beginning of the year. The fund charges a front-end load of 3%. The securities in which the fund invests increase in value by 10% during the year. The fund's expense ratio is 1.3%. What is your rate of return if you sell your shares at the end of the year?

You purchased 1,200 shares of Guarantee Fund at a price of $30 per share at the beginning of the year. You paid a front-end load of 4%. The securities in which the fund invests increase in value by 10% during the year. The fund's expense ratio is 1.2%. What is your rate of return on the fund if you sell your shares at the end of the year?