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You have found a mutual fund that you like and want to analyze the fee structure. The fund has class A and class B shares.
You have found a mutual fund that you like and want to analyze the fee structure. The fund has class A and class B shares. Class A shares have a 5% front load, no back load, and no 12b-1 fees. Class B shares have no front load, a 5% back load that falls by 1% for each full year invested and has a 0.50% annual 12b-1 fee. You anticipate that the fund will returi 10% per year after other fees not mentioned above (e.g. mgt fees) and plan to invest $10,000. After four full years (just beginning year 5) which of these two share classes would you prefer? O A, because it will be $1,042.21 higher B, because it will be $323.89 higher A. because it will be $742.38 higher B. because it will be $1,046.32 higher
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