A mutual fund had average daily assets of $3.0 billion in 2009.The fund sold $600 million worth of stock and purchased $700 million worth of stock during the year.The fund's turnover ratio is ___.

Question

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 $600 million (sales), so the turnover ratio is $600 million / $3.0 billion = 0.20 or 20%.

A Mutual Fund Had Average Daily Assets of $3