- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 5. Other Major Return Measures
CFA Practice Question
If the gross returns are the same for a small fund and a large fund, which one should have a higher net return, all other factors being equal?
B. The large fund
C. The net return should be the same.
A. The small fund
B. The large fund
C. The net return should be the same.
Correct Answer: B
This is because the large fund can spread its largely fixed administrative expenses over a larger asset base.
User Contributed Comments 3
| User | Comment |
|---|---|
| johntan1979 | And most large funds offer discounts for longer holds. |
| leuping | Johntan1979 is an absolute legend. |
| houstcarr | well if it can spread its fixed costs over a larger base... then not all other factors are equal. |