Understanding the Costs Involved in Mutual Fund Investments The following table presents information on four different open-end mutual funds. Use the information in the table to answer the questions that follow. FUND NAV NET CHG YTD % RET GibEx p 11.32 -0.02 2.5 PwrSL r 30.77 0.08 5.4 PFIN 27.81 0.22 7.9 Majtrk 42.21 0.31 9.0 The mutual fund charges a back-end load fee. True or False: You can generally expect funds that charge back-end load fees to outperform funds that do not charge these fees. True
Understanding the Costs Involved in Mutual Fund Investments The following table presents information on four different open-end mutual funds. Use the information in the table to answer the questions that follow. FUND NAV NET CHG YTD % RET GibEx p 11.32 -0.02 2.5 PwrSL r 30.77 0.08 5.4 PFIN 27.81 0.22 7.9 Majtrk 42.21 0.31 9.0 The mutual fund charges a back-end load fee. True or False: You can generally expect funds that charge back-end load fees to outperform funds that do not charge these fees. True
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:4. Comparing mutual funds
Understanding the Costs Involved in Mutual Fund Investments
The following table presents information on four different open-end mutual funds. Use the information in the table to answer the questions that follow.
FUND
GibEx p
PwrSL r
PFIN
Majtrk
NAV NET CHG YTD % RET
11.32
-0.02
2.5
30.77
0.08
5.4
27.81
0.22
7.9
42.21
0.31
9.0
The mutual fund
True
True or False: You can generally expect funds that charge back-end load fees to outperform funds that do not charge these fees.
charges a back-end load fee.
False
Transcribed Image Text:Suppose Majtrk has a front-end load fee of 9%. If you purchase 100 shares of this fund at the NAV, you will pay a commission of S
in one month, you sell the shares, you
pay a redemption fee at that time.
If you are interested only in funds without any fee, you
the quotations as listed in the table, it is
11,
to use additional online resources to find no-load funds, because using only
to determine the amount of any front-end load fee that the fund may charge.
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