Suppose You Consider Investing $10,000 in a Load Fund from Which

question 85

Multiple Choice

Suppose you consider investing $10,000 in a load fund from which a fee of 3 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 0 percent redemption fee. Which is better and by how much?

• A) load fund by $151
• B) no load fund by $136
• C) funds are equal
• D) no load fund by $421
• E) load fund by $115

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Definitions:

Total Product Curve

A graphical representation showing how total output of a firm varies with a change in a single input while holding other inputs constant.

Average Total Cost Curve

A graphical representation showing the average cost per unit of output at different levels of production.

R&D

Short for Research and Development; activities companies undertake to innovate and introduce new products or services.

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