Chapter 4, Problem 24PS

Summary Introduction

Adequate information:

The investor has purchased 1000 shares at a price of $20 per share of new funds. The increase in value of the securities accounts for 12% during the year. The front end load accounts for 4% and the expense ratio accounts for 1.2%.

To calculate:

Rate of return on the fund in case the shares are sold by the investor at the year end

Introduction:

Rate of return refers to the ratio of loss or profit ascertained in the financial year with respect to the investment which is generally expressed in percentage of decrease or increase in the investment's value during the given period of time.