Question
Listed here, is the 10-year, per-share performance record of Larry, Moe, & Curley's Growth Fund, as obtained from the fund's May 30, 2016, prospectus. Use
Listed here, is the 10-year, per-share performance record of Larry, Moe, & Curley's Growth Fund, as obtained from the fund's May 30, 2016, prospectus. Use this information to find LM&C's holding period return in 2016 and 2013. Also find the fund's rate of return over the 5-year period 201220162, and the 10-year period 20072016. Finally, rework the 4 return figures, assuming the LM&C fund has a front-end load charge of 2% (of NAV). Comment on the impact of load charges on the return behavior of mutual funds.
The holding period return for 2016 is %. (Round to two decimal places.)
The holding period return for 2013 is %. (Round to two decimal places.)
The fund's rate of return over the 5-year period of 20122016 is %. (Round to two decimal places.)
The fund's rate of return over the 10-year period of 20072016 is %. (Round to two decimal places.)
Assuming a front-end load charge of 2% (of NAV), the holding period return for 2016 is %. (Round to two decimal places.)
Assuming a front-end load charge of 2% (of NAV), the holding period return for 2013 is %. (Round to two decimal places.)
Since the front-end load (increases decreases) the total return and (increases decreases) the purchase price, the cumulative effect will be a(n) (increase decrease) in the HPR.(Select from the drop-down menus.)
Assuming a front-end load charge of 2% (of NAV), the fund's rate of return over the 5-year period of 20122016 is %. (Round to two decimal places.)
Assuming a front-end load charge of 2% (of NAV), the fund's rate of return over the 10-year period of 20072016 is %. (Round to two decimal places.)
In both cases, the yield went (up down) but only marginally compared to the one-year HPR, which (increased decreased) significantly. This occurs because the impact of the front-end load, payable only at the time of the initial purchase, is (maximized minimized) over longer holding periods.(Select from the drop-down menus.)
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