You purchased 4,200 shares in the New Pacific Growth Fund on January 2, 2010, at

Question

You purchased 4,200 shares in the New Pacific Growth Fund on January 2, 2010, at an offering price of $63.50 per share. The front-end load for this fund is 5 percent, and the back-end load for redemptions within one year is 1 percent. The underlying assets in this mutual fund appreciate (including reinvested dividends) by 4 percent during 2010, and you sell back your shares at the end of the year. If the operating expense ratio for the New Pacific Growth Fund is 1.25 percent, what is your total return from this investment? Assume that the annual expense ratio is netted out of the fund's return. (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. Omit the "%" sign in your response.)

Explanation / Answer

Details Amt $ Value of shares (4200 shares @$63.5 per share)=               266,700 Frond end load=5% Investment value =266700/0.95=               280,737 Investment value after 1 year ( with 4% appreciation )=266700*1.04= $     277,368.00 Less Expense ratio @1.25% $          3,467.10 Less Back end load @1%= $          2,773.68 Net Amount after expenses and load deduction = $     271,127.22 Net Procceds from Investment sale $     271,127.22 Invested amount = $     280,736.84 Net Return from investment   $       (9,609.62) Return % = -3.42% So Net return of the Investment =-3.42%

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