IFIC Mutual Funds Licensing Practice Exam · Question
An investor holds a Series F mutual fund in a non-registered account. Their advisor charges a separate annual fee of 1.00% of assets under management. The fund's MER is 0.75%. If the fund returns 8% before fees, what is the investor's net return after accounting for fund fees and advisor fees?
The investor pays both the fund's MER (0.75%) and the separate advisor fee (1.00%). Therefore, the total fees are 0.75% + 1.00% = 1.75%. The net return is 8% -
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Question: An investor holds a Series F mutual fund in a non-registered account. Their advisor charges a separate annual fee of 1.00% of assets under management. The fund's MER is 0.75%. If the fund returns 8% before fees, what is the investor's net return after accounting for fund fees and advisor fees?
Answer options: ✅ 6.25%
- 7.25%
- 6.00%
- 8.00%
Correct answer: 6.25%
Explanation: The investor pays both the fund's MER (0.75%) and the separate advisor fee (1.00%). Therefore, the total fees are 0.75% + 1.00% = 1.75%. The net return is 8% - 1.75% = 6.25%.
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