Answered step by step
Verified Expert Solution
Question
1 Approved Answer
olved in Mutual Fund Investments Sam is debating purchasing a mutual fund, but he has some questions for his financial advisor, Teresa. The following table
olved in Mutual Fund Investments Sam is debating purchasing a mutual fund, but he has some questions for his financial advisor, Teresa. The following table presents information on four different open-end mutual funds that Sam and Teresa are discussing. Use the information in the table to answer the questions that follow. NAV FUND MinTp PwiSLT NET CHG -0.04 YTD % RET 3.1 20.32 18.77 33,81 35.21 6.0 0,06 0.20 GMAR 8.5 BRRT 0.29 9.6 SAM: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between 125-1 fees and fund performance? TERESA: Generally, funds that charge 12-1 fees, such as Mint outperform funds that do not charge these fees. SAM: What about front-end load fees? For example, suppose BRRT has a front-end load fee of 6%, when do I pay this fee? TERESA: If you purchase 100 shares of this fund at the NAV, you will pay a commission of will pay in front-end fees but when you sell these shares you SAM: It sounds like these fees could start to add up. What's the most I can expect to pay in fees? MacBook Pro TERESA: If a fund charges a 4% front-end load and a 3% 12-b1 fee, then it can change a maximum of only charges without violating the cap. % in back-end load SAM: Thanks! This was really helpful. So it sounds like you'd recommend looking for funds whenever possible, Grade It Now Save & Continue Continue without saving Mark Pro olved in Mutual Fund Investments Sam is debating purchasing a mutual fund, but he has some questions for his financial advisor, Teresa. The following table presents information on four different open-end mutual funds that Sam and Teresa are discussing. Use the information in the table to answer the questions that follow. NAV FUND MinTp PwiSLT NET CHG -0.04 YTD % RET 3.1 20.32 18.77 33,81 35.21 6.0 0,06 0.20 GMAR 8.5 BRRT 0.29 9.6 SAM: After some research, I've narrowed it down to these four funds, but can you explain to me the relationship between 125-1 fees and fund performance? TERESA: Generally, funds that charge 12-1 fees, such as Mint outperform funds that do not charge these fees. SAM: What about front-end load fees? For example, suppose BRRT has a front-end load fee of 6%, when do I pay this fee? TERESA: If you purchase 100 shares of this fund at the NAV, you will pay a commission of will pay in front-end fees but when you sell these shares you SAM: It sounds like these fees could start to add up. What's the most I can expect to pay in fees? MacBook Pro TERESA: If a fund charges a 4% front-end load and a 3% 12-b1 fee, then it can change a maximum of only charges without violating the cap. % in back-end load SAM: Thanks! This was really helpful. So it sounds like you'd recommend looking for funds whenever possible, Grade It Now Save & Continue Continue without saving Mark Pro
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started