Back-End Loaded Mutual Funds Are Most Appropriate For

question 146

Multiple Choice

Back-end loaded mutual funds are most appropriate for:

• A) an investor with a short time horizon.
• B) an investor with a long time horizon.
• C) an investor who wants to purchase a no-load product.
• D) all investors.
• E) none of the above

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Definitions:

Straight-Line Depreciation

A process for dividing the expense of a tangible asset uniformly across its expected lifetime in annual segments.

Net Annual Operating

Typically refers to the net operating income or profit generated by a business over the course of a year, excluding non-operating revenues and expenses.

After-Tax Discount Rate

The rate used to discount future cash flows of an investment after taxes have been accounted for, reflecting the investor's required rate of return net of taxes.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity.