An investor decides to invest $250,000 in one of the two following mutual funds. If the investor has a 10-year investment horizon, which fund should they select? The investor expects both funds will have 15% annual return on assets.

Fund A: 2.5% front-end load, 1.00% annual expense ratio

Fund B: no sales charges, 1.25% annual expense ration

A. Fund A

B. Fund B

C. The investor is indifferent between Funds A and B since 10 years is the breakeven point between the 2.5% front -end and the 0.25% difference in annual expenses

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