I am having difficulty figuring out the answer to this question. Does anyone know how to calculate this?



One year ago, Allison purchased 250 shares of a mutual fund which has a front-end load of 5.75 percent. The NAV at the time of purchase was $ 40. Today, the NAV is $ 42. The fund had total annual expenses of 1.65 percent. There were no fund distributions this past year. What is Allison’s rate of return for the year?

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  1. 250 shares at $ 40 NAV = $ 10,000 divided by 0.9425 = 10,610.08 total investment. At sale time she receives 250 x $ 42 = $ 10,500. Allison has a loss of $ 110.08 or her return is a negative 1.04%. The annual expense ratio does not enter into the calculation, because it is already reflected in the NAV.


  2. 250 X 40 = 10,000 $

    Load 5.75% = 575

    Total investment = 10,575$

    On redemption Allison will get 250 X 42 = 10500 $

    Loss = 75$

    Loss % = 75/ 10575 X 100 = 0.7092 % Loss

    Annual expenses is already reflecting in the NAV