You Invest in a Mutual Fund That Charges a 3

question 36

Multiple Choice

You invest in a mutual fund that charges a 3% front end load,1% total annual fees,and a 0% back end load on Class A shares.The same fund charges 0% front end load,1% total annual fees,and a 2% back end load on Class B shares.What are the total fees in year one on a Class A investment of $20,000 with no growth in value?

• A) 658
• B) 794
• C) 885
• D) 902

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Definitions:

Straight-Line Depreciation

An approach to evenly spread the expense of an asset over its period of utility.

Working Capital

The gap between a firm's present assets and liabilities, showing its operational efficiency and ability to cover short-term obligations.

Operating Cash Inflow

Cash generated from a company's normal business operations.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making it the simplest depreciation method.