Suppose You Consider Investing $1,000 in a Load Fund Which

question 30

Multiple Choice

Suppose you consider investing $1,000 in a load fund which charges a fee of 2%,and you expect the fund to earn 14% over the next year.Alternatively,you could invest in a no-load fund with similar risk that is expected to earn 9% and charges a 1/2 percent redemption fee.Which is better and by how much?

• A) Funds are equal
• B) Load fund by $32.65
• C) Load fund by $50.55
• D) No-load fund by $64.55
• E) No-load fund by $44.30

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Definitions:

Process Cost Accounting

A method of accounting that accumulates and assigns costs to units of product in large quantities, where the products are indistinguishable from each other.

Separate Record

Maintaining independent records for different departments, entities, or operations within an organization for clarity and accountability.

Materials Requisitions

Requests for the supply of materials necessary for production or operational purposes within an organization.

Storeroom

A room or space used for the storage of goods or supplies, typically in a business or retail setting.