A Mutual Fund Had Average Daily Assets of $2

question 55

Multiple Choice

A mutual fund had average daily assets of $2.0 billion in 2016.The fund sold $500 million worth of stock and purchased $600 million worth of stock during the year.The fund's turnover ratio is

• A)27.5%.
• B)12%.
• C)15%.
• D)25%.

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Definitions:

Nonrecourse Debt

A type of loan where the lender's recovery options in case of default are limited to seizing the collateral securing the loan, without pursuing further compensation from the borrower.

At-Risk

The term "at-risk" generally refers to the exposure to potential loss or damage, but in finance, it often involves the amount of money invested in a business venture to the extent that it can be lost.

Material Participant

A taxpayer involved in business operations on a regular, continuous, and substantial basis, according to IRS regulations.

Adjustments

Deductions from gross income that are made before calculating taxable income, leading to the calculation of the Adjusted Gross Income.