Canadian Securities Course (CSC) Practice Exam · Question
The Smith Canadian Equity Mutual Fund has an MER of 2.10%. If an investor holds $50,000 in this fund for one year, how much, in dollars, would be attributed to the MER, assuming no capital gains or losses and stable NAV?
The MER is expressed as an annual percentage of the fund's NAV. Therefore, for a $50,000 investment, the MER cost would be $50,000 * 0.0210 = $1,050.
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Question: The Smith Canadian Equity Mutual Fund has an MER of 2.10%. If an investor holds $50,000 in this fund for one year, how much, in dollars, would be attributed to the MER, assuming no capital gains or losses and stable NAV?
Answer options: ✅ $1,050
- $210
- $1,000
- $2,100
Correct answer: $1,050
Explanation: The MER is expressed as an annual percentage of the fund's NAV. Therefore, for a $50,000 investment, the MER cost would be $50,000 * 0.0210 = $1,050.
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