Return on the fund benchmark

Reference no: EM132465590

At the beginning of the year, a mutual fund has a NAV of $20. At the end of the year, the NAV is $21 and the fund has received no dividends or other distributions throughout the year. The return on the fund's benchmark over the same period of time was 10%. The fund's return was 5% and did not beat the benchmark.

Suppose the fund incurred expenses of $2 per fund share during the year. What was the return on the fund's underlying portfolio before any expenses that affect NAV ? Did this before-expense return beat the fund's benchmark?

(a) 15%; No, the fund's underlying portfolio beat its benchmark

(b) 0%; No, the fund's underlying portfolio beat its benchmark

(d) 20%; Yes, the fund's underlying portfolio beat its benchmark

(e) None of the above

Reference no: EM132465590

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