# Fund Management Fee Question

Investment Amount 1000, with 12% annual return Sales Charge 1.5% Sales Charge on redemption: .75% during first 4 years Total Fee: 2.2% 39. The return by Class B shares over 3 year period is closest to ? A.28.48% B. 8.71% C. 6.19% I got 1284.81 and I divided by 1000 and got A 28.48% cause to me the problem is asking for total return over the 3 year period? but the answer is B which is obtained by taking ^1/3 of 28.48% Is it me or does the question sounds really ambiguous? This is from the Elan 2000 qbank

It should state annual return I guess.

can you show the calculations please?

1.12 x 1.12x 1.12x .985 x .978 x .978 x .978 x .9925 Total return over 3 years 9assuming shares are redeemed after 3 years)

I think it should be: year 1 return: 1.12 x 0.985x 0.978 year 2 return: 1.12 x 0.978 year 3 return: 1.12 x 0.978 x 0.9925 Geometric return over 3 years: (year1 return x year 2 return x year 3 return) ^ (1/3) -1 = answer B Thanks for posting the question!

I ran into this exact same problem on Elan Mock Test 3. It should have stated “Annual Return” instead of “Return”.