You Purchase 500 Shares of a Mutual Fund with a Front-End

question 51

Multiple Choice

You purchase 500 shares of a mutual fund with a front-end load of 5 percent and a NAV of $63.12. The assets of the fund (including reinvested dividends) appreciated at 12 percent for the year, and the fund had total expenses of 1.80 percent. What was your return for the year?

• A) 12.00%
• B) 4.70%
• C) 6.40%
• D) 10.20%
• E) 4.94%

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Break Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Variable Costs

Costs that change in direct proportion to changes in levels of activity or production volume, such as materials and labor.