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

question 74

Multiple Choice

Suppose you consider investing $15,000 in a load fund from which a fee of 5 percent is deducted and you expect the fund to earn 12 percent over the next year. Alternatively, you could invest in a no-load fund that is expected to earn 10 percent 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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