Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculate the after-withdrawal future value of $11 comma 000 invested for five years in each share class in the table below. In terms of costs,

Calculate the after-withdrawal future value of $11 comma 000 invested for five years in each share class in the table below. In terms of costs, which would be the best investment for someone who knows the fund will be sold at the end of the five-year period? Assume that each fund's gross (before fees) total return is 12.00 percent per year. Cost Class "A" Class "B" Class "C" Front-end load 5.36 0.00 0.00 Back-end load 0.00 4.12 0.87 Declining 1% per year First year only Management fee 0.55 0.90 0.95 12b-1 fee 0.30 0.60 0.90 The after-withdrawal future value of the Class "A" share in five years is $nothing . (Round to the nearest cent.) The after-withdrawal future value of the Class "B" share in five years is $nothing . (Round to the nearest cent.) The after-withdrawal future value of the Class "C" share in five years is $nothing . (Round to the nearest cent.) In terms of costs, which would be the best investment for someone who knows the fund will be sold at the end of the five-year period? (Select the best answer below.) A. Class "Upper C " would be the better investment for someone who knows that the fund will be sold at the end of five years because the lower overall costs result in a higher after-withdrawal future value of $17 comma 836.73 . B. Class "Upper A " would be the better investment for someone who knows that the fund will be sold at the end of five years because the lower overall costs result in a higher after-withdrawal future value of $17 comma 660.98 . C. Class "Upper B " would be the better investment for someone who knows that the fund will be sold at the end of five years because the lower overall costs result in a higher after-withdrawal future value of $18 comma 100.16 .

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Practical Financial Management

Authors: William R. Lasher

4th Edition

0324260768, 9780324260762

More Books

Students also viewed these Finance questions

Question

What is your current position?

Answered: 1 week ago