Be able to explain how to compute the annual rate of return on a mutual fund. Explain how annual expenses and front-end load expenses effect the computation of the annual rate of return of the mutual fund. 

Why are the expenses important? Be able to cite any empirical evidence. 

Also understand the benefits of passive index funds.

Answer rating: 100% (QA)

To compute the annual rate of return on a mutual fund you need to consider the change in the funds net asset value NAV over a specific period usually a year along with any distributions or dividends r... View the full answer