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

question 106

Multiple Choice

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