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A sector fund specializing in commercial bank stocks had average daily assets of $3.7 billion during the year. This fund sold $1.58 billion worth of stock during the year, and its turnover ratio was .42. How much stock did this mutual fund purchase during the year

Sagot :

Tundexi

Answer:

$1.554 billion

Explanation:

Turnover Ratio = Purchases / Average Inventory

0.42 = Purchases / $3.7 billion

Purchases = $3.7 billion * 0.42

Purchases = $1.554 billion

So, the value of stock that the mutual fund purchase during the year is $1.554 billion

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