Evaluating the performance of a mutual fund involves which of the following activities?
I.Determining its rate of return
II.Calculating its net asset value
III.Examining its turnover ratio
IV.Examining its administrative expenses
A)I and II
B)I,III,and IV
C)II,III,and IV
D)All four

Question

Quizplus · Accepted Answer

Determining the rate of return is important as it helps to evaluate the fund's performance over time. Calculating the net asset value is significant as it indicates the fund's worth based on the market value of the assets it holds. Examining the turnover ratio is essential as it measures the frequency of the fund's buying and selling of securities, which can impact its performance. Examining the administrative expenses is also important as it shows how much of the fund's assets are spent on managing the investments, and high administrative expenses can negatively impact the fund's returns. Therefore, only options I, III, and IV include all these significant measures for evaluating mutual fund performance.

Evaluating the Performance of a Mutual Fund Involves Which of the Following