You Are Considering Investing $1,000 in a Load Fund That

question 22

Multiple Choice

You are considering investing $1,000 in a load fund that charges a fee of 2.5 percent, with an expected return of 12 percent over the next year. Alternatively, you could invest in a no-load fund with similar risk that is expected to earn 8 percent and charges a 1/2 percent redemption fee. Which is better and by how much?

• A) load fund by $12.00
• B) load fund by $15.32
• C) load fund by $17.40
• D) no-load fund by $6.55
• E) no-load fund by $1.30

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Definitions:

Self-Transcendence

A state or experience beyond the personal self, often involving spiritual or peak experiences that transcend ordinary consciousness.

Intrinsic Motivation

Motivation that is driven by an interest or enjoyment in the task itself, rather than external pressure or reward.

Extrinsic Motivation

Motivation stimulated by external incentives like financial gain, recognition, academic scores, and commendation.

Self-Disclosure

The process of disclosing confidential, personal details about oneself to other people.