You are considering an investment in a mutual fund with a 4% load and an expense ratio of 0.5%. You can invest instead in a bank CD paying 6% interest.

Now suppose that instead of a front-end load the fund assesses a 12b-1 fee of 0.5% 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? Does your answer in this case depend on your time horizon?Now suppose that instead of a front-end load the fund assesses a 12b-1 fee of 0.5% 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? Does your answer in this case depend on your time horizon?