Question

hi..please help..so i took a test and i got all of it wrong and im not sure how to do this problems..this is Investment class..please explain every step because im going to study using this material.thank you

Fall 2010 4. Compare and contrast open end ve closed-end mutual funds will sell as long you want to buy the share, management comparin thom to you, while closed end mutual funds Preferred stocks on any public traced securities such as cquity, bond therand's count or back with vestment preferred stocks; options, eton Part II (15 points each): 5. You invest $10.000 each in two separate funds. The first fund is the which has a front-end load of 6% and a back-end load of 2.5%. The fund ratio is 2%. The second fund is the Performance (PER) Fund which has loads, but the annual expense ratio is 5%. After you liquidate your holding identical amounts coming in from both funds. HL's annual period has been 14%. coming in from both funds HL's annual return over your A) What annual return must have PER generated if you invested for you HL 10,000 10,000 wek-end load of 2 596 The fund's annual expense The first fund is the Heavy Load (HL) Fund und which has no front or back end squidate your holdings, you end up with PER: 10,000 9500 1-0.05) 9500-10000 --5% Ing frut 6% 2.5% 10,000 21 910 ex 84% B) What annual return must have PER generated if you invested for 10 years? 10,000 (1-0.05) 5987.37 5987,3770000 10,000 - -40.13% c) In order to keep up with HL's performance, what needed to happen to the return from PER when investment period increased from 1 to 10 and why? HL=10,000 (1-.06%) (17.14-.02)' (1-0.0150 =7698.6 T PER=10,000 (105) = 7698.22 The Per hooded to savest up to 5 year and loment to keep up with HL's performance Page 2