Question
In: Finance
Consider a fund that charges 5% front-end load. In an average year, the fund's reported return...
Consider a fund that charges 5% front-end load. In an average year, the fund's reported return is 11.5%. What is the average realized annual return to an investor investing in the fund for 3 years?
Hint: it might help to start with a fixed dollar investment. Choose any number you like.
Solutions
jeff jeffy answered 9 months agoRelated Solutions
You are considering an investment in a mutual fund with a 5% front-end load and an...
You are considering an investment in a mutual fund with a 5%
front-end load and an expense ratio of 1.45%. You can invest
instead in a bank CD paying 7% interest.
a.
If you plan to invest for two years, what annual rate of return
must the fund portfolio earn for you to be better off in the fund
than in the CD? Assume annual compounding of returns. (Do
not round intermediate calculations. Enter your answer as a
percentage rounded...
You are considering an investment in a mutual fund with a 5% front-end load fee and...
You are considering an investment in a mutual fund with a 5%
front-end load fee and expense ratio of 0.25%. You can invest
instead in a bank CD paying 2% interest.
(a) If you plan to invest for 3 years, what annual rate of
return must the fund portfolio earn for you to be better off in the
fund than in the CD? Assume annual compounding of returns.
(b) How does your answer change if you plan to invest for...
Which of the following is NOT a mutual fund charge/fee A. 12b-1 charges B. Front-End load...
Which of the following is NOT a mutual fund
charge/fee
A.
12b-1 charges
B.
Front-End load
C.
Back-End load
D.
Prepayment fee
You invest in a mutual fund that charges a 3% front-end load, 1% total annual fees,...
You invest in a mutual fund that charges a 3% front-end load, 1%
total annual fees, and a 0.5% back-end load. How much will you pay
in fees on a $15,000 investment that does not grow if you cash out
after 5 years of no gain?
You invest in a mutual fund that charges a 3% front-end load, 1%
total annual fees, and a 2% back-end load, which decreases .5% per
year. How much will you pay in fees on...
You invest in a mutual fund that charges a 3% front-end load, 1% total annual fees,...
You invest in a mutual fund that charges a 3% front-end load, 1%
total annual fees, and a 0% back-end load on Class A shares. The
same fund charges a 0% front-end load, 2% total annual fees, and a
2% back-end load on Class B shares. If you plan to sell the fund
after 4 years, which is a better choice, Class A shares or Class B
shares? Assume $100 is invested, and assume a 10% annual
return before expenses.
A mutual fund charges 6% front-end load and 1% operating and 12b-1 expenses. At the beginning...
A mutual fund charges 6% front-end load and 1% operating and
12b-1 expenses. At the beginning of the year, the fund has $100
million assets under management and 10 million shares outstanding.
During the year the value of assets held by the fund increases by
12% and the fund receives dividends of $1 million. What is the
fund's NAV at the end of the year? (The number of mutual fund
shares outstanding is still 10 million at the end of...
A mutual fund charges 6% front-end load and 3% operating and 12b-1 expenses. At the beginning...
A mutual fund charges 6% front-end load and 3% operating and
12b-1 expenses. At the beginning of the year, the fund has $200
million assets under management and 10 million shares outstanding.
During the year the value of assets held by the fund increases by
10% and the fund receives dividends of $2 million. What is the
fund's NAV at the end of the year? (The number of mutual fund
shares outstanding is still 10 million at the end of...
A mutual fund charges 6% front-end load and 3% operating and 12b-1 expenses. At the beginning...
A mutual fund charges 6% front-end load and 3% operating and
12b-1 expenses. At the beginning of the year, the fund has $200
million assets under management and 10 million shares outstanding.
During the year the value of assets held by the fund increases by
10% and the fund receives dividends of $2 million. What is the
fund's NAV at the end of the year? (The number of mutual fund
shares outstanding is still 10 million at the end of...
The XYZ Equity Fund sells Class A shares with a front-end load of 5% and Class...
The XYZ Equity Fund sells Class A shares with a front-end load
of 5% and Class B shares with 12b-1 fees of 0.6% annually as well
as back-end load fees that start at 4% and fall by 1% for each full
year the investor holds the portfolio (until the fourth year).
Assume rate of return on the fund portfolio net of operating
expenses is 9% annually.
(a) (9 points) What will be the value of a $10,000 investment in
Class...
Fund A has a front-end load of 4.5% (of the year-beginning amount). Meanwhile, Fund B has...
Fund A has a front-end load of 4.5% (of the year-beginning
amount). Meanwhile, Fund B has a backend load of 6% which decreases
by 1% per year. That is, the backend load will be at 5% if the
investor sells the fund at the end of year 2, 4% at the end of year
3, and so on, until it becomes zero. In addition, Fund B charges
additional 12b-1 fee of 0.5% per year at each year end. Assume Fund...
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