Suppose the return on the S&P index is 12%. A mutual fund has a group of...
Suppose the return on the S&P index is 12%. A mutual fund has a group of experts who can earn 15%. The load is 2%, and the management fee is 1.5%, Supposing that you can buy the S&P index, which of these two investments would you prefer and why?
Homework Answers
I would prefer the S&P index since the effective return is more than mutual fund. Return = 12%
Effective return on mutual fund = 15%-2%-1.5% = 11.5%
Hence, the preferred investment will be A Index
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Suppose the return on the S&P index is 12%. A mutual fund
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Jennifer is interested in the mutual fund RBC U.S.
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