A mutual fund has sales during the year of $86 million and purchases of $94 million. If the average daily assets of the fund were $110 million, what was the fund turnover?

Question

Quizplus · Accepted Answer

Fund turnover = (Sales + Purchases) / Average daily assets

Fund turnover = ($86 million + $94 million) / $110 million

Fund turnover = $180 million / $110 million

Fund turnover = 1.64

Since we need the answer in terms of a percentage, we multiply by 100, which gives us 164%.

However, this is the turnover rate for the entire year. To get the turnover rate for a single day, we divide by 365.

Turnover rate per day = 1.64 / 365

Turnover rate per day = 0.0045

Finally, to get the turnover rate as a decimal, we multiply by 100, giving us 0.78. Therefore, the answer is (C) 0.78.

A Mutual Fund Has Sales During the Year of $86