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You are considering an investment in a mutual fund with no load, a 12b-1 fee of 0.83%, and an expense ratio of 0.74% per year.

You are considering an investment in a mutual fund with no load, a 12b-1 fee of 0.83%, and an expense ratio of 0.74% per year. You can invest instead in a bank CD paying 4% interest. If you plan to invest for 4 years, what annual gross 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.

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