FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are considering an investment in a mutual fund with a 4% front-end load and an expense ratio of 0.65%. You can invest instead in

You are considering an investment in a mutual fund with a 4% front-end load and an expense ratio of 0.65%. 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 0.90% 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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bond Markets Analysis And Strategies

Bond Markets Analysis And Strategies

Authors: Frank J. Fabozzi

6th Edition

0131986430, 9780131986435

More Books

Students also viewed these Finance questions

Question

★★★★★
What payment is required at the end of each month for five years to repay a loan of $8000 at 8.4% compounded monthly?

Answered: 1 week ago

Question

★★★★★
7. Determine the p-value when using the signed rank statistic in Problems 1 and 2.

Answered: 1 week ago

Question

★★★★★
=+21.10. (a) Show that uncorrelated variables need not be independent. (b) Show that Var[E; , X,] = Ef ,-, Cov[X ,, X,] = E"_ , Var[ X,] +

Answered: 1 week ago

Question

★★★★★
The condensed product-line income statement for Suffolk China Ware Company for the month of December is as follows: Fixed costs are 15% of the cost of goods sold and 40% of the selling and...

Answered: 1 week ago

Question

★★★★★
We will be creating a program that simulates a simple memory game. In this memory game, a grid of face down cards is created. Every element of the grid has a matching pair. The user's goal is to find...

Answered: 1 week ago

Question

★★★★★
How do accruals and deferrals affect financial statements

Answered: 1 week ago

Question

★★★★★
Calculate the "Room Total" for the first transaction. Use an IF function to calculate a 10% discount for any stay greater than or equal to 7 nights. Copy and paste the function down the column to...

Answered: 1 week ago

Question

★★★★★
During the cherry blossom time in Houston, the sales for 'The Black House' tends to increase. Due to pandemic, the gift shop management decide to keep the shop open during weekends (Friday, Saturday,...

Answered: 1 week ago

Question

★★★★★
A motorist needs to visit a total of 6 cities over the course of the next few days and wants to minimize the total distance driven to visit all 6 cities. The distances between each pair of cities is...

Answered: 1 week ago

Question

★★★★★
The velocity of the bullet with mass mk has an angle with respect to the horizontal. The speed of the bullet is Vk when it hits a block with mass m. The bullet remains caught in the block. As a...

Answered: 1 week ago

Question

★★★★★
5. Neil Special Pottery, LLC has decided to use a regular output of 800 units per month for this year. They can use overtime up to 80 units per month and use subcontracting for the remaining units to...

Answered: 1 week ago

Question

★★★★★
Understand a department managers role in locating job candidates

Answered: 1 week ago

Question

★★★★★
Be sensitive to the problems potentially encountered through a department managers active involvement in checking references or answering references requests

Answered: 1 week ago

Question

★★★★★
Understand the essential partnership between a department manager and human resources in recruiting employees

Answered: 1 week ago

Previous Question Next Question