(A) Adequate information: 12b-1 fees on Loaded-up fund- 1% Expense ratio on Loaded-up fund- .75% Front end load on Economy fund- 2% Expense ratio on Economy fund- .25% Return on portfolio of each fund- 6% To compute: growth in investment of each fund after 1 year Introduction: Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

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Answer 1

Question

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

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Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.65%. Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.35%. Assume the rate of return on both funds’ portfolios (before any fees) is 7% per year. Required: How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Investment Values Loaded Up Fund Economy Fund How much will an investment of $100 in each fund grow to after 4 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Investment Values Loaded Up Fund Economy Fund How much will an investment of $100 in each fund grow to after 11 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Investment Values Loaded Up Fund Economy Fund

Loaded-Up Fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.70%. Economy Fund charges a front-end load of 2%, but has no 12b-1 fee and has an expense ratio of 0.30%. Assume the rate of return on both funds' portfolios (before any fees) is 6% per year. Required: a. How much will an investment of $100 in each fund grow to after 1 year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Loaded-Up Fund Economy Fund Investment Values b. How much will an investment of $100 in each fund grow to after 4 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Mutual Fund Loaded-Up Fund Economy Fund Investment Values

Loaded-Up Fund charges a 12b-1 fee of 1.00% and maintains an expense ratio of 0.75%. Economy Fund charges a front-end load of 2.0%, but has no 12b-1 fee and an expense ratio of 0.25%. Assume the rate of return on both funds' portfolios (before any fees) is 12% per year. How much will an investment of $1,000 in each fund grow to after: (Round your answers to 2 decimal places.) a. 1 year b. 3 years c. 10 years Loaded-Up Fund Economy Fund

Answer 2

Question

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 6

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 7

Chapter 4, Problem 19PS

Summary Introduction

(A)

Adequate information:

12b-1 fees on Loaded-up fund- 1%

Expense ratio on Loaded-up fund- .75%

Front end load on Economy fund- 2%

Expense ratio on Economy fund- .25%

Return on portfolio of each fund- 6%

To compute:growth in investment of each fund after 1 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 8

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 9

Summary Introduction

(B)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 3 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 10

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 11

Summary Introduction

(C)

Adequate information:

Growth in loaded up fund- 4.25% per annum

Growth in economy fund- 5.64% per annum

To compute:growth in investment of each fund after 10 year

Introduction:

Growth in investment made in mutual fund is represented by the rate of return on portfolio assets after charging expense ratio.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4 - Prob. 1PS Ch. 4 - Prob. 2PS Ch. 4 - Prob. 3PS Ch. 4 - Prob. 4PS Ch. 4 - Prob. 5PS Ch. 4 - Prob. 6PS Ch. 4 - Prob. 7PS Ch. 4 - Prob. 8PS Ch. 4 - Prob. 9PS Ch. 4 - Prob. 10PS

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