You have decided to invest $11,300 in the Pinnacle fund. Over the long haul, the Pinnacle fund is expected to earn a return o on the portfolio (gross of fees). However, Pinnacle offers several classes of funds. Therefore, you can choose to pay a front l 11.5% and escape 12-b1 fees, or you can avoid the load fee by paying 12-b1 fees of 0.75%. Required: a. If your investment horizon is 16 years, what is your expected terminal wealth under each strategy? b. Which option should you choose? Complete this question by entering your answers in the tabs below. Required A Required B
You have decided to invest $11,300 in the Pinnacle fund. Over the long haul, the Pinnacle fund is expected to earn a return o on the portfolio (gross of fees). However, Pinnacle offers several classes of funds. Therefore, you can choose to pay a front l 11.5% and escape 12-b1 fees, or you can avoid the load fee by paying 12-b1 fees of 0.75%. Required: a. If your investment horizon is 16 years, what is your expected terminal wealth under each strategy? b. Which option should you choose? Complete this question by entering your answers in the tabs below. Required A Required 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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Transcribed Image Text:You have decided to invest $11,300 in the Pinnacle fund. Over the long haul, the Pinnacle fund is expected to earn a return of 14.05%
on the portfolio (gross of fees). However, Pinnacle offers several classes of funds. Therefore, you can choose to pay a front load of
11.5% and escape 12-b1 fees, or you can avoid the load fee by paying 12-b1 fees of 0.75%.
Required:
a. If your investment horizon is 16 years, what is your expected terminal wealth under each strategy?
b. Which option should you choose?
Complete this question by entering your answers in the tabs below.
Required A
Required B
If your investment horizon is 16 years, what is your expected terminal wealth under each strategy?
Note: Round your answer to 2 decimal places.
No-load fund
Front-load fund
< Required A
Required B >
You have decided to invest $11,300 in the Pinnacle fund. Over the long haul, the Pinnacle fund is expected to earn a return of 14.05%
on the portfolio (gross of fees). However, Pinnacle offers several classes of funds. Therefore, you can choose to pay a front load of
11.5% and escape 12-b1 fees, or you can avoid the load fee by paying 12-b1 fees of 0.75%.
Required:
a. If your investment horizon is 16 years, what is your expected terminal wealth under each strategy?
b. Which option should you choose?
Complete this question by entering your answers in the tabs below.
Required A Required B
Requirement
Which option should you choose?
Required B >
No-load
Front-load
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