When You Invest in a Typical Load Fund with an 8.5

question 3

True/False

When you invest in a typical load fund with an 8.5% load, the fund must appreciate by over 10% in value for you to break even on your investment.

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Definitions:

Internal Rate

Often related to the internal rate of return (IRR), it's a metric used in financial analysis to estimate the profitability of potential investments.

Time Value

The theory that money today is more valuable than the same quantity in the future, due to its potential to accumulate additional value.

Profitability Index

A financial tool that calculates the ratio between the present value of cash inflows and the present value of initial investment, often used in capital budgeting.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to analyze the profitability of an investment.