Many funds advertise their returns as the amount to which $10,000 invested in the fund would have grown to over 5 or 10 years. These results assume that

Question

Quizplus · Accepted Answer

This choice is the most accurate as it assumes reinvestment of all dividends, interest, and capital gains on a pre-tax basis, which is the most common practice in fund accounting. Option B makes an assumption about a 15% tax deduction, which may not be applicable to all investors, and option C only refers to dividends and interest, leaving out capital gains. Option D assumes the absence of any reinvestment, which is not a realistic scenario in the case of most funds.

Many Funds Advertise Their Returns as the Amount to Which