An Investor Pays $15 for a Share of a Fund

question 17

Multiple Choice

An investor pays $15 for a share of a fund, and there is a $1.20 load charge. The manager's performance will be measured based on an investment of

• A) $14.90.
• B) $15.10.
• C) $13.80.
• D) $16.20.

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Definitions:

RRSP

A Canadian retirement savings plan that defers taxes on contributions and investment earnings until withdrawal.

Compounded Quarterly

An approach to interest calculation that involves adding the interest to the principal sum every three months.

Compounded Semi-annually

The process of calculating and adding interest to the principal sum of a loan or deposit twice a year, which increases the amount of future interest earned.

Compounded Semi-annually

Interest calculated twice a year, factoring in previously accrued interest for each calculation.