A mutual fund had average daily assets of $2.0 billion in 2018. The fund sold $500 million worth of stock and purchased $600 million worth of stock during the year. The fund's turnover ratio is

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Quizplus · Accepted Answer

The turnover ratio is calculated as the lesser of purchases or sales divided by the average daily assets. Here, the lesser amount is $500 million (sales), so the turnover ratio is $500 million / $2.0 billion = 0.25 or 25%.

A Mutual Fund Had Average Daily Assets of $2