Suppose You Consider Investing $5,000 in a Load Fund from Which

question 16

Multiple Choice

Suppose you consider investing $5,000 in a load fund from which a fee of 8% is deducted and you expect the fund to earn 12% over the next year. Alternatively, you could invest in a no load fund which is expected to earn 10% and which takes a 1/2% redemption fee. Which is better and by how much?

• A) Load fund by $320.50
• B) Load fund by $575.50
• C) Funds are equal
• D) No load fund by $320.50
• E) No load fund by $575.50

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Definitions:

Carl Rogers

An influential American psychologist who founded the humanistic approach to psychology and developed client-centered therapy, emphasizing the importance of the self and its development.

Abraham Maslow

An American psychologist best known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority, leading to self-actualization.

Affiliation Motive

The innate desire to form and maintain social bonds and interpersonal connections.

Implicit Motivation

Refers to motivation that is unconscious, driving behavior without the individual being consciously aware of the motivating factors.