Question

Fund ABC charges a 12b-1 fee of 1.10% and maintains an expense ratio of .85%. Fund XYZ charges a front-end load of 3% but has no 12b-1 fee and an expense ratio of .15%. Assume the rate of return on both funds’ portfolios (before any fees) is 6% per year. Suppose you invest $1000 in each fund. Compute the value of the investments after the end of year 1, year 3, and year 10.

Answer 1

Answer for the question:

Fund ABC charges a 12b-1 fee of 1.10% and maintains an expense ratio of .85%. Fund XYZ charges a front-end load of 3% but has no 12b-1 fee and an expense ratio of .15%. Assume the rate of return on both funds’ portfolios (before any fees) is 6% per year. Suppose you invest $1000 in each fund. Compute the value of the investments after the end of year 1, year 3, and year 10.

is given in the attachment.

Step-by-step explanation: