A mutual fund had average daily assets of $4.0 billion in 2016. 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

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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 $1.5 billion (sales), and the average daily assets are $4.0 billion. Thus, the turnover ratio is ($1.5 billion / $4.0 billion) * 100% = 37.5%.

A Mutual Fund Had Average Daily Assets of $4