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Answer :
Given information:Investment: $10,000Expense ratio: 2%Return: 6%To find the net return, we have to calculate the expenses incurred due to the expense ratio. We can use the following formula to calculate the net return:
Net return = Gross return × (1 - expense ratio)Where, gross return = the return earned by the mutual fund, expense ratio = the percentage of expenses incurred due to the expense ratio So, Net return = 6% × (1 - 2%) = 6% × 0.98= 5.88%Now, we can calculate the net income earned from the investment using the following formula: Net income = Investment × Net return Where, Investment = the amount invested in the mutual fund, Net return = the net return earned by the mutual fund. So, Net income = $10,000 × 5.88% = $588 (rounded off to the nearest dollar)Therefore, the net income earned from the investment is $588 (rounded off to the nearest dollar).
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