31% D 4:28D) None of the above21. Funds Alpha and Beta have thefollowing as shown below. If you willinvest $5,000,000 and expect a rateof return on both funds 14%, whichstatement is CORRECT? (*Note thatthe Back-End load declines by 1%annually) *Fund AlphaFund BetaFront-End load0%5%Back-End Load7%*0%1.2%12B-1 fees0.85%Expense Ratio0.15%0%A) Fund Alpha is better than FundBeta since value of investment in 3years is greater.B) Fund Beta is better than FundAlpha since value of investment in 3years is greater.C) Value of investment of FundAlpha in 10 years $16,972,836D) A & CE) None of the above

Solution- Option (A) is correct answer Particulars Working Alpha Beta Investment 50,00,000…

21. Funds Alpha and Beta have the following as shown below. If you will invest $5,000,000 and expect a rate of return on both funds 14%, which statement is CORRECT? (*Note that the Back-End load declines by 1% annually) *

21. Funds Alpha and Beta have the following as shown below. If you will invest $5,000,000 and expect a rate of return on both funds 14%, which statement is CORRECT? (Note that the Back-End load declines by 1% annually)

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 2FPE

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Question

31% D 4:28
D) None of the above
21. Funds Alpha and Beta have the
following as shown below. If you will
invest $5,000,000 and expect a rate
of return on both funds 14%, which
statement is CORRECT? (*Note that
the Back-End load declines by 1%
annually) *
Fund Alpha
Fund Beta
Front-End load
0%
5%
Back-End Load
7%*
0%
1.2%
12B-1 fees
0.85%
Expense Ratio
0.15%
0%
A) Fund Alpha is better than Fund
Beta since value of investment in 3
years is greater.
B) Fund Beta is better than Fund
Alpha since value of investment in 3
years is greater.
C) Value of investment of Fund
Alpha in 10 years $16,972,836
D) A & C
E) None of the above

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