INVESTMENTS(LL)W/CONNECT
INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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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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