Question

1. A sector fund specializing in commercial bank stocks had average daily assets of $3.7 billion during the year. Suppose the annual operating expense ratio for the mutual fund is .85 percent, and the management fee is .50 percent. How much money did the fund’s management earn during the year? If the fund doesn’t charge any 12b-1 fees, how much were miscellaneous and administrative expenses during the year? (Do not round intermediate calculations. Enter your answer in dollars not in millions, e.g., 1,234,567.)

- Management Fee?

- Miscellaneous and administrative expenses?

2. You purchased 5,400 shares in the New Pacific Growth Fund on January 2, 2019, at an offering price of $63.90 per share. The front-end load for this fund is 5 percent, and the back-end load for redemptions within one year is 2 percent. The underlying assets in this mutual fund appreciate (including reinvested dividends) by 6 percent during 2019, and you sell back your shares at the end of the year. If the operating expense ratio for the New Pacific Growth Fund is 1.05 percent, what is your total return from this investment? (Assume that the operating expense is netted against the fund’s return.) (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Answer 1