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

question 23

Multiple Choice

Suppose you consider investing $1,000 in a load fund that charges a fee of 2 percent, and you expect the fund to earn 11 percent over the next year. Alternatively, you could invest in a no-load fund with similar risk that is expected to earn 7 percent and charges a 1/2 percent redemption fee. Which is better and by how much?

• A) funds are equal
• B) no-load fund by $36.98
• C) load fund by $45.25
• D) load fund by $23.15
• E) no-load fund by $15.52

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Definitions:

Difficult To Treat

Describes medical or psychological conditions that do not readily respond to standard therapies or interventions.

Chronic Illnesses

Long-standing, persistent diseases or conditions that often require ongoing medical attention and can impact an individual's quality of life.

Psychological Disorders

Mental disorders characterized by dysfunctional patterns of thought, behavior, and emotion, which impair the individual's ability to function in daily life.

Insomnia

A sleep disorder characterized by difficulty falling and/or staying asleep.