pay $21,600 to the Laramie Fund, which has an NAV of $18 per share at the beginning of the The fund deducted a front-end load of 4% at the time of the purchase. The securities in the then increased in value by 10% during the year. The fund's expense ratio is 1.3% and is ucted from year-end asset values. What is your rate of return on the fund if you sell your shar he end of the year? Select the answer closest to the correct return. t: The formula on slide # 23 in the "Mutual Funds, ETFs, ..." slide set solves for the gross return rate of return would be the gross return minus 1. The formula on slide # 23 can be written as X(1-f)(1+r-a)" (1-6) ossReturn = (1 − f)(1+r-a)" (1-b) or as Gross Return = X re X is the dollar amount invested. The other variables in the formula (f, r, a, n, b) are all define he slide set and in the lecture.) 12%
pay $21,600 to the Laramie Fund, which has an NAV of $18 per share at the beginning of the The fund deducted a front-end load of 4% at the time of the purchase. The securities in the then increased in value by 10% during the year. The fund's expense ratio is 1.3% and is ucted from year-end asset values. What is your rate of return on the fund if you sell your shar he end of the year? Select the answer closest to the correct return. t: The formula on slide # 23 in the "Mutual Funds, ETFs, ..." slide set solves for the gross return rate of return would be the gross return minus 1. The formula on slide # 23 can be written as X(1-f)(1+r-a)" (1-6) ossReturn = (1 − f)(1+r-a)" (1-b) or as Gross Return = X re X is the dollar amount invested. The other variables in the formula (f, r, a, n, b) are all define he slide set and in the lecture.) 12%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Vijay
Transcribed Image Text:You pay $21,600 to the Laramie Fund, which has an NAV of $18 per share at the beginning of the
year. The fund deducted a front-end load of 4% at the time of the purchase. The securities in the
fund then increased in value by 10% during the year. The fund's expense ratio is 1.3% and is
deducted from year-end asset values. What is your rate of return on the fund if you sell your shares
at the end of the year? Select the answer closest to the correct return.
(Hint: The formula on slide #23 in the "Mutual Funds, ETFs, ..." slide set solves for the gross return.
Your rate of return would be the gross return minus 1. The formula on slide # 23 can be written as
X(1-f)(1+r-a)" (1-b)
Gross Return = (1 - f)(1+r-a)" (1-b) or as Gross Return =
X
where X is the dollar amount invested. The other variables in the formula (f, r, a, n, b) are all defined
in the slide set and in the lecture.)
4.2%
10%
8.7%
O 4.7%
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