Calculate the Annual Rate of Return for a Mutual Fund

question 32

Multiple Choice

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

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

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Definitions:

Machinery

Heavy and complex machines or equipment used in various industries for manufacturing, construction, or specific tasks requiring mechanical force.

Book Value

The value of an asset as recorded on the balance sheet, calculated by subtracting any associated depreciation or amortization from its original cost.

Straight-line Method

A depreciation method that allocates an equal amount of the asset's cost to each year of its useful life.

Annual Rate

The rate of interest or growth a financial asset or liability would achieve over a period of one year.