Suppose You Consider Investing $15,000 in a Load Fund from Which

question 100

Multiple Choice

Suppose you consider investing $15,000 in a load fund from which a fee of 5% is deducted and you expect the fund to earn 12% over the next year.Alternatively,you could invest in a no load fund which is expected to earn 10% and which takes a 1/2 percent redemption fee.Which is better and by how much?

• A) Load fund by $318.45
• B) No load fund by $457.50
• C) Funds are equal
• D) Load fund by $415.10
• E) No load fund by $211.51

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Definitions:

Equal Protection Clause

The provision in the Fourteenth Amendment to the U.S. Constitution that guarantees that no state will “deny to any person within its jurisdiction the equal protection of the laws.” This clause mandates that state governments treat similarly situated individuals in a similar manner.

Suspect Trait

A characteristic or feature in a person that may cause them to be viewed with suspicion or as a potential culprit in a criminal investigation.

Compelling Government Interest

A test of constitutionality that requires the government to have compelling reasons for passing any law that restricts fundamental rights, such as free speech, or distinguishes between people based on a suspect trait.

Federal Form

A standardized document required by a federal agency for specific purposes.