Question

You are considering an investment in a mutual fund with a 5%
load and an expense ratio of 0.85%. You can invest instead in a
bank CD paying 7% interest. **a.** If you plan to
invest for two years, what annual rate of return must the fund
portfolio earn for you to be better off in the fund than in the CD?
Assume annual compounding of returns. **(Do not round
intermediate calculations. Round your answer to 2 decimal
places.)**

annual rate of return | ? | % |

**b.** If you plan to invest for six years, what
annual rate of return must the fund portfolio earn for you to be
better off in the fund than in the CD? Assume annual compounding of
returns. **(Do not round intermediate calculations. Round
your answer to 2 decimal places.)**

annual rate of return | ? | % |

**c.** Now suppose that instead of a front-end load
the fund assesses a 12b-1 fee of 1.10% per year. What annual rate
of return must the fund portfolio earn for you to be better off in
the fund than in the CD? **(Do not round intermediate
calculations. Round your answer to 2 decimal
places.)**

annual rate of return | ? | % |

Answer #1

You are considering an investment in a mutual fund with a 4%
load and an expense ratio of 0.5%. You can invest instead in a bank
CD paying 6% interest.
a. If you plan to invest for two years, what
annual rate of return must the fund portfolio earn for you to be
better off in the fund than in the CD? Assume annual compounding of
returns. (Do not round intermediate calculations. Round
your answer to 2 decimal places.)
b....

You are considering an investment in a mutual fund with a 5%
load and expense ration of 0.5%. You can invest in a bank CD paying
3% interest.
A. If you plan to invest for 4 years, what annual rate of return
must the fund portfolio earn fot you to be better offin the fund
than in the CD? Assume annual compounding of returns.(Do not round
intermediate calculations. Round your answer to 2 decimal
places.)
Annual rate of return__________%
B....

You are considering an investment in a mutual fund with a 4%
load and an expense ratio of 0.5%. You can invest instead in a bank
CD paying 6% interest.
a. If you plan to invest for two years, what annual rate of return
must the fund portfolio earn for you to be better off in the fund
than in the CD? Assume annual compounding of returns.
b. How does your answer change if you plan to invest for six...

You are considering an investment in a mutual fund with a 4%
front-end load and an expense ratio of 1.1%. You can invest instead
in a bank CD paying 6% interest. If you plan to invest for two
years, what annual rate of return must the fund portfolio earn for
you to be better off in the fund than in the CD? Assume annual
compounding of returns. (Do not round intermediate
calculations. Enter your answer as a decimal rounded to...

You are considering an investment in a mutual fund with a 4%
front-end load and an expense ratio of 1.1%. You can invest instead
in a bank CD paying 6% interest. If you plan to invest for six
years, what annual rate of return must the fund portfolio earn for
you to be better off in the fund than in the CD? Assume annual
compounding of returns (Do not round intermediate
calculations. Enter your answer as a decimal rounded to...

You are considering an investment in a mutual fund with a 4%
load and an expense ratio
of 0.5%. You can invest instead in a bank CD paying 6%
interest.
Now suppose that instead of a front-end load the fund assesses a
12b-1 fee of 0.5% per
year. What annual rate of return must the fund portfolio earn for
you to be better off in
the fund than in the CD? Does your answer in this case depend on
your...

You are considering an investment in a mutual fund with a 4%
load and an expense ratio of 0.5%. You can invest instead in a bank
CD paying 6% interest. ) You are considering an investment in a
mutual fund with a 4% load and an expense ratio of 0.5%. You can
invest instead in a bank CD paying 6% interest. ) You are
considering an investment in a mutual fund with a 4% load and an
expense ratio of...

You are going to invest in a stock mutual fund with a front-end
load of 5 percent and an expense ratio of 1.57 percent. You also
can invest in a money market mutual fund with a return of 2.6
percent and an expense ratio of 0.30 percent. If you plan to keep
your investment for 2 years, what annual return must the stock
mutual fund earn to exceed an investment in the money market fund?
What if your investment horizon...

You are going to invest in a stock mutual fund with a front-end
load of 3 percent and an expense ratio of 1.5 percent. You also can
invest in a money market mutual fund with a return of 2.2 percent
and an expense ratio of 0.30 percent. If you plan to keep your
investment for 2 years, what annual return must the stock mutual
fund earn to exceed an investment in the money market fund? What if
your investment horizon...

A pension fund manager is considering three mutual funds. The
first is a stock fund, the second is a long-term government and
corporate bond fund, and the third is a T-bill money market fund
that yields a sure rate of 5.5%. The probability distributions of
the risky funds are:
Expected Return
Standard Deviation
Stock fund (S)
15
%
32
%
Bond fund (B)
9
%
23
%
The correlation between the fund
returns is 0.15.
a.
What...

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