The Investments Fund sells Class A shares with a front-end load of 6% 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 11% annually. a-1. If you invest in each fund and sell after 4 years, how much will you receive from each sale? (Round your answers to 2 decimal places.) Class A Class B a-2. Are Class A or Class B shares the better choice for you? O Class A Class B Amounts b-1. If you invest in each fund and sell after 15 years, how much will you receive from each sale? (Round your answers to 2 decimal places.) Class A Class B Amounts b-2. Are Class A or Class B shares the better choice for you?
The Investments Fund sells Class A shares with a front-end load of 6% 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 11% annually. a-1. If you invest in each fund and sell after 4 years, how much will you receive from each sale? (Round your answers to 2 decimal places.) Class A Class B a-2. Are Class A or Class B shares the better choice for you? O Class A Class B Amounts b-1. If you invest in each fund and sell after 15 years, how much will you receive from each sale? (Round your answers to 2 decimal places.) Class A Class B Amounts b-2. Are Class A or Class B shares the better choice for you?
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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Transcribed Image Text:The Investments Fund sells Class A shares with a front-end load of 6% 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 11% annually.
a-1. If you invest in each fund and sell after 4 years, how much will you receive from each sale? (Round your answers to 2 decimal
places.)
Class A
Class B
a-2. Are Class A or Class B shares the better choice for you?
O Class A
O Class B
Amounts
b-1. If you invest in each fund and sell after 15 years, how much will you receive from each sale? (Round your answers to 2 decimal
places.)
Class A
Class B
O Class A
O Class B
Amounts
b-2. Are Class A or Class B shares the better choice for you?
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