Multiple choice

The Expense Ratio as a measure of a fund's performance is defined by a fund's

  1. total expenses and average net assets

  2. total expenses and total assets

  3. average expenses and average net assets

  4. None of the above
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A Correct answer
Explanation

Expense Ratio is calculated as (Total Expenses / Average Net Assets) × 100. This ratio measures the percentage of fund assets that go toward covering operating expenses, making it a key metric for evaluating cost-efficiency. Using total assets or average expenses would give incorrect calculations.

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