Respuesta :
Investors use average annual return as their selection criterion to account for variations in time horizons among investment possibilities.
The average annual return (AAR), which is typically expressed across three, five, and ten years, is a percentage that represents the historical average return of a mutual fund.
What is average annual return?
- The average annual return is reported before operating expense ratio for the fund. Additionally, it excludes sales fees, if any, and brokerage commissions on portfolio transactions.
- The average annual return (AAR), in its most basic form, gauges how much money a mutual fund made or lost over a specific time frame.
- As part of their mutual fund investing plan, investors thinking about making a mutual fund investment frequently research the AAR and compare it to other closely related mutual funds.
- The average annual return is a useful tool for assessing a mutual fund's long-term performance when choosing one.
- To properly understand the constancy of a fund's annual total returns, investors should also consider the fund's annual performance.
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