Question
You have invested in two mutual funds: $500 in Fund A 4 years ago, and $600 in Fund B 3 years ago. Today, these two
You have invested in two mutual funds: $500 in Fund A 4 years ago, and $600 in Fund B 3 years ago. Today, these two investments are both worth $800 (assuming no dividends or other distributions). Assume each fund continues to earn its respective rate of return, which is constant every year. Which one of the following statements is correct concerning these funds? (assuming annual compounding of interest rate).
A) Your investment in Fund B will be worth more than your investment in Fund A in three years.
B) One year ago, you have less money in Fund A than in Fund B
C) Fund B earns a higher annual rate of return than Fund A.
D) Fund B has earned an average annual return of 11.11%.
E) Fund A has earned an average annual return of 15%
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