You Pay $216,000 to the Capital Hedge Fund Which Has

question 47

Multiple Choice

You pay $216,000 to the Capital Hedge Fund which has a price of $18.00 per share at the beginning of the year.The fund deducted a front-end commission of 4%.The securities in the fund increased in value by 15% during the year.The fund's expense ratio is 2% 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?

• A) 5.35%
• B) 7.23%
• C) 8.19%
• D) 10.00%

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Definitions:

Junk Bonds

High-yield bonds that carry a higher risk of default compared to investment-grade bonds, typically issued by companies with lower credit ratings.

Real Estate Loans

Loans specifically provided for purchasing property, including both residential and commercial properties.

Medium Of Exchange

Items sellers generally accept and buyers generally use to pay for a good or service; the primary job of money.

Keynesian Motive

An economic theory proposed by John Maynard Keynes, suggesting that demand for goods and services is the driving force in an economy, particularly during times of economic downturn.