Calculate the Annual Rate of Return for a Mutual Fund

question 23

Multiple Choice

Calculate the annual rate of return for a mutual fund with the following fees and expected returns $$\begin{array} { c c c c c } \text { Investment } & \text { E(Retum) } & \text { Load } & 12 b - 1 \text { fee } & \text { Years Held } \\\text { Mutual Fund } & 7 \% & 4 \% & 0.50 \% & 7 \text { years }\end{array}$$

• A)4.95%
• B)5.0%
• C)5.85%
• D)2.5%
• E)6.55%

---

Definitions:

Hot Dog

A cooked sausage, traditionally grilled or steamed and served in a sliced bun.

Price

The price expected, obligatory, or delivered in payment for a particular thing.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.

Equation

A mathematical statement that asserts the equality of two expressions, typically represented with the symbol "=".