Question
In: Finance
The Investments Fund sells Class A shares with a front-end load of 6% and Class B...
The Investments Fund sells Class A shares with a front-end load of 6% and Class B shares with 12b-1 fees of 0.75% annually as well as back-end load fees that start at 5% and fall by 1% for each full year the investor holds the portfolio (until the fifth year). Assume that you have $1,000 to invest and the portfolio rate of return net of operating expenses is 12% annually.
a-1. If you invest in each fund and sell after 4 years, how much will you receive from each sale? (Round your answers to 2 decimal places.)
Class A?
Class B?
a-2. Are Class A or Class B shares the better choice for you?
Class A
Class B
b-1. If you invest in each fund and sell after 14 years, how much will you receive from each sale? (Round your answers to 2 decimal places.)
Class A?
Class B?
b-2. Are Class A or Class B shares the better choice for you?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
The Investments Fund sells Class A shares with a front-end load of 6% and Class B...
The Investments Fund sells Class A shares with a front-end load
of 6% and Class B shares with 12b-1 fees of .5% annually as well as
back-end load fees that start at 5% and fall by 1% for each full
year the investor holds the portfolio (until the fifth year).
Assume the portfolio rate of return net of operating expenses is
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You are considering an investment in a mutual fund with a 4% front-end load. The fund...
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You are considering an investment in a mutual fund with a 4% front-end load. The fund...
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front-end load. The fund charges a back-end load of 5, 4, 3, 2, and
1 percent if the shares are redeemed within the first 5 years,
respectively. The expense ratio of 0.5%. Alternatively, you can
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what annual rate of return must the fund portfolio earn for you...
You are considering an investment in a mutual fund with a 4% front-end load. The fund...
You are considering an investment in a mutual fund with a 4%
front-end load. The fund charges a back-end load of 5, 4, 3, 2, and
1 percent if the shares are redeemed within the first 5 years,
respectively. The expense ratio of 0.5%. Alternatively, you can
invest instead in a bank saving account paying 6% interest per
year.
a. If you plan to invest for 3 years, what annual rate of return
must the fund portfolio earn for you...
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