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Suppose the initial investment is $10,000. The IBM Fund sells shares of 2 classes or categories:...

Suppose the initial investment is $10,000. The IBM Fund sells shares of 2 classes or categories: Class A shares with a front-end load of 4% and with 12b-1 fees of 1.0% annually, and Class B shares with 12b-1 fees of 0.5% annually, and with back-end load fees, starting at 5% and fall by 1% for each full year the investor holds the portfolio (until the fifth year). Assume the rate of return on the fund portfolio, net of operating expenses is 10% annually. a) If you plan to sell the fund after 1 year, what will be the value of a $100,000 investment in each, Class A and Class B shares? Explain. b) What will be the value of this investment, if you plan to sell the fund after 5 years? Explain.

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ekkarill92 answered 2 years ago
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