You are considering an investment in a mutual fund with a 5% load and an expense ratio of 1.25%. You can invest instead in a bank CD paying 7% interest. Required: a. If you plan to invest for two years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Annual rate of return b. If you plan to invest for six years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Annual rate of return % Annual rate of return % c. Now suppose that instead of a front-end load the fund assesses a 12b-1 fee of 1.50% per year. What annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? (Do not round intermediate calculations. Round your answer to 2 decimal places.) %

You are considering an investment in a mutual fund with a 5% load and an expense ratio of 1.25%. You can invest instead in a bank CD paying 7% interest Required: a. If you plan to invest for two years, what annual rate of return must the fund portfollo earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If you pian to invest for six years, what annual rate of rgturn must the fund portfolio earn for you to be better off in the fund than in the CO? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Now suppose that instead of a front-end load the fund assesses a 12b1 fee of 1.50s per year. What annual rate of return must the und portiolio earn for you to be better off in the fund than in the CD? (Do not round intermediate calculations. Round your answer to decimal places.)