The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 1% 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 12% annually.   a. If you invest in each fund and sell after 4 years, how much will you receive from each sale? b. If you invest in each fund and sell after 10 years, how much will you receive from each sale?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 1% 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 12% annually.
 
a. If you invest in each fund and sell after 4 years, how much will you receive from each sale?

b. If you invest in each fund and sell after 10 years, how much will you receive from each sale?

 

 

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