A mutual fund had average daily assets of $4.0 billion in 2009.The fund sold $1.5 billion worth of stock and purchased $1.6 billion 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 value is $1.5 billion (sales), and the average daily assets are $4.0 billion. So, the turnover ratio is $1.5 billion / $4.0 billion = 0.375 or 37.5%.

A Mutual Fund Had Average Daily Assets of $4