I am not sure if this question is to advance for this board but here goes nothing. I been trying to do this question for a while and just can't seem to come up with the formula. If you post the answer can you also please post the formula so I see how you got to that answer.

You purchased shares of a mutual fund at a prices of $12 per share at the beginning of the year and paid a front-end load of 4.75%. If the securities in which the fund invested increased in value by 9% during the year, and the funds expense ratio was 1.5%, your return if you sold the fund at the end of the year would be?

A-4.75
B-3.54
C-2.65
D 2.39
E-none of the above.

TIA

Quote:

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Originally Posted by Dmitriy

I am not sure if this question is to advance for this board but here goes nothing. I been trying to do this question for a while and just can't seem to come up with the formula. If you post the answer can you also please post the formula so i see how you got to that answer.

You purchased shares of a mutual fund at a prices of $12 per share at the beginning of the year and paid a front-end load of 4.75%. If the securities in which the fund invested increased in value by 9% during the year, and the funds expense ratio was 1.5%, your return if you sold the fund at the end of the year would be?

A-4.75
B-3.54
C-2.65
D 2.39
E-none of the above.

TIA

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I was able to solve it, so here is the answer in case someone else find them self trying to solve something very similar

being 4.75% is front load fee we take 12.00-(12.00*4.75)=11.43
we take 9%-1.5%=7.5%
11.43*1.075=12.28725
(12.28725-12)/12=2.39375