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Alexa plans to invest $50,000 in a mutual fund that requires either a 4% front-end load or a 4% back end load. She expects the
Alexa plans to invest $50,000 in a mutual fund that requires either a 4% front-end load or a 4% back end load. She expects the fund to return 8% per year and she plans to hold the investment for 3 years. Calculate the size of the front-end and back end load and show evidence that Alexa is indifferent between the front-end versus back-end load alternatives.
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