What Would Be the Return on a $1000 Investment in a Mutual

question 112

Multiple Choice

What would be the return on a $1000 investment in a mutual fund whose NAV is $20? The fund has a 3 percent front-end load and, during the holding period, $400 of fund distributions are reinvested at a NAV of $25 (no load applied to reinvestment) . The fund is ultimately sold at a NAV of $24. (Round to the nearest tenth of a percent.)

• A)14.8 percent
• B)10.5 percent
• C)15.3 percent
• D)10.8 percent

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Definitions:

Nonlinear Association

A relationship between two variables where the change in one variable does not produce a proportional change in the other variable.

Linear Association

A relationship between two variables that can be represented on a graph as a straight line, indicating a consistent rate of change.

Moderately Strong Association

A statistical term indicating a reasonably strong relationship between two variables, showing noticeable correlation but not absolute prediction.

Little or No Association

A term used in statistics to describe a situation where there is very weak or no relationship between two variables being studied.