Which of the following will affect your capital gains liability?

Question

Quizplus · Accepted Answer

Only turnover ratio and changes in net asset value will affect your capital gains liability. The turnover ratio measures the frequency with which a mutual fund buys and sells assets in its portfolio. Higher turnover ratios lead to more capital gains distributions and can result in a greater tax liability for investors. Changes in net asset value can also trigger capital gains taxes when shares are sold. The expense ratio, on the other hand, represents the fees charged by the mutual fund company and does not directly impact capital gains liability.

Which of the Following Will Affect Your Capital Gains Liability