Answered: Claire wants to buy shares in a mutual…

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter3: Data Visualization

Section: Chapter Questions

Problem 6P: The file MutualFunds contains a data set with information for 45 mutual funds that are part of the...

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5. Comparing loads and fees

Claire wants to buy shares in a mutual fund and has narrowed her selection to the following four funds. Answer the questions below to help assess each fund in terms of the fees each charges.

Fund	NAV	Net Chg.	YTD % Ret.
MinT p	$15.32	-0.05	2.5
IntRA r	$18.77	0.05	5.4
MRGG r	$27.81	0.19	7.9
MajTrkⁿ	$45.21	0.28	9.0

Suppose MajTrkⁿ charges a commission of 8%. This_________an example of a relatively low-load fund. If Claire purchases $4,000 worth of MajTrkⁿ shares, only $___________will actually be invested. This means that the commission—as a percentage of the amount invested—is equal to .

The mutual fund MinT p is a no-load fund that imposes a_________on reinvested dividends as well as on the initial investment. Funds that charge this type of fee _________ generally be expected to outperform funds that do not charge these fees.

Claire is planning on holding her shares for at least a year and wants a fund that will cost her as little in fees as possible. If IntRA r charges a deferred sales charge and MRGG r charges a redemption fee, then she is best off investing in which of the following funds?

a. IntRA r

b. MinT p

c. MajTrkⁿ

d. MRGG r

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