A Mutual Fund Has $50 Million in Assets at the Beginning

question 51

Multiple Choice

A mutual fund has $50 million in assets at the beginning of the year and 1 million shares outstanding throughout the year.Throughout the year assets grow at 12%.The fund imposes a 12b-1 fee on all shares equal to 1%.The fee is imposed on year end asset values.If there are no distributions what is the end of year NAV for the fund?

• A) $50.00
• B) $55.44
• C) $56.12
• D) $54.55

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Definitions:

Consumer Incomes

The total earnings received by consumers, including wages, salaries, benefits, and income from investments, influencing their purchasing power and consumption patterns.

Demand Shift

Occurs when a change in factors other than the price of the good itself leads to a change in consumer demand, causing the demand curve to move left or right.

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity supplied, leading to no shortage or surplus.

MR

Short for Marginal Revenue, it is the increase in revenue from selling one additional unit of a good or service.