Question
You invest $10,000 each in two separate funds. The first fund is the HeavyLoad (HL) Fund which has a front-end load of 6% and a
You invest $10,000 each in two separate funds. The first fund is the HeavyLoad (HL) Fund which has a front-end load of 6% and a back-end load of 2%. The fund's annual expense ratio is 1.21%. The second fund is the Performance (PER) Fund which has no front or back end loads, but the annual expense ratio is 5%. After you liquidate your holdings, you end up with identical amounts coming in from both funds. HLs annual return over your investment period has been 14%.
A) What annual return must have PER generated if you invested for 1 year?
B) What annual return must have PER generated if you invested for 10 years?
C) In order to keep up with HLs performance, what need
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