Mutual fund turnover is measured as:

Question

Quizplus · Accepted Answer

Mutual fund turnover is calculated as the lesser of fund sales or purchases for a given period divided by the average daily assets of the fund. This measures the trading activity in the mutual fund's portfolio over the given period. Option A is incorrect because it divides total fund sales by total fund assets, which does not account for the timing or frequency of the sales. Option B is incorrect because it only considers one side of the trading activity (sales or purchases) and does not account for the total turnover. Option C is incorrect because it divides total fund purchases by average daily assets, which does not account for the frequency or timing of the purchases. Option E is incorrect because it divides average daily assets by the sales or purchases, which does not give a comprehensive measure of the trading activity.

Mutual Fund Turnover Is Measured As