A mutual fund had average daily assets of $2.0 billion in 2016. 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 by dividing the total value of shares traded during the year by the average daily assets. In this case, the total value of shares traded is $500 million + $600 million = $1.1 billion. The average daily assets are $2.0 billion. Therefore, the turnover ratio is $1.1 billion / $2.0 billion = 0.55, or 55%.

A Mutual Fund Had Average Daily Assets of $2