The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 0.5% annually as well as back-end load fees that start at 5% and fall by 1% (percentage point) for each full year the investor holds the portfolio (until the fifth year). Assume that you have $1,000 to invest and the portfolio rate of return net of operating expenses is 13% annually. a. If you invest in each fund and sell after 4 years, are Class A or Class B shares the better choice for you? Class A Class B b. If you invest in each fund and sell after 12 years, are Class A or Class B shares the better choice for you? Class A Class B
The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 0.5% annually as well as back-end load fees that start at 5% and fall by 1% (percentage point) for each full year the investor holds the portfolio (until the fifth year). Assume that you have $1,000 to invest and the portfolio rate of return net of operating expenses is 13% annually. a. If you invest in each fund and sell after 4 years, are Class A or Class B shares the better choice for you? Class A Class B b. If you invest in each fund and sell after 12 years, are Class A or Class B shares the better choice for you? Class A Class B
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 0.5% annually as well as back-end load fees that start at 5% and fall by 1% (percentage point) for each full year the investor holds the portfolio (until the fifth year). Assume that you have $1,000 to invest and the portfolio
a. If you invest in each fund and sell after 4 years, are Class A or Class B shares the better choice for you?
Class A
Class B
b. If you invest in each fund and sell after 12 years, are Class A or Class B shares the better choice for you?
Class A
Class B
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