You expect a tax-free municipal bond portfolio to provide a rate of return of 5.2%. Management fees of the fund are 0.72%. What fraction of portfolio income is given up to fees? (Round your answer to 1 decimal place.)

b. If the management fees for an equity fund also are 0.72%, but you expect a portfolio return of 24.0%, what fraction of portfolio income is given up to fees? (Round your answer to 1 decimal place.)

c. For which fund might management fees be a bigger factor in your investment decision?

• Bond fund

• Equity fund

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