Why would an investor be willing to pay a load for a fund when there are...
Why would an investor be willing to pay a load for a fund when there are funds that don’t charge a load?
Homework Answers
Most of the retail investors in the financial market are not experts or may not at times be well versed with the market analysis. Hence the job of market analysis is given to brokers or advisors who does the fund research, makes the recommendation, sells the fund and places the trade for the purchase. In exchange for these additional services, load fees is provided to the fund house to meet the expenses. The service provided by the broker or analyst is considered to be a value add for the retail investor if he/she is not well versed in the market.
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Why would an investor be willing to pay a load for a fund when
there are...
What does it mean when a fund charges a “load”? Who gets the monies collected for...
What does it mean when a fund charges a “load”? Who gets the monies collected for the load? (Hint: it’s usually not the company managing the fund.) Some loads can be as high as 4-5%. Why would an investor be willing to pay a load for a fund when there are funds that don’t charge a load?
Suppose an individual invests $5,000 in a load mutual fund for two years. The load fee...
Suppose an individual invests $5,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 2 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.75 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 8 percent each...
Suppose an individual invests $40,000 in a load mutual fund for two years. The load fee...
Suppose an individual invests $40,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 3 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.60 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 5 percent each...
Suppose an individual invests $50,000 in a load mutual fund for two years. The load fee...
Suppose an individual invests $50,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 2 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.90 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 5 percent each...
A mutual fund charges a 2% front-end load. If an investor invest $2,000 in the fund...
A mutual fund charges a 2% front-end load. If an investor invest $2,000 in the fund and the net asset value per share (NAVPS) is $5,00, how many units can he buy? a. 408 b.400 c.386 d.392
What is the most a rational investor should be willing to pay for the right to...
What is the most a rational investor should be willing to pay for the right to receive $12,000 per year (the first payment is at the end of the first year) for 20 years if her annual opportunity cost is 12%? (Choose the closest answer)
Suppose an individual invests $25,000 in a load mutual fund for two years. The load fee entails an up-front commission...
Suppose an individual invests $25,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 3 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.85 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 8 percent each...
Two years ago an investor invested $28 thousand into a fund with a 4% front-end load,...
Two years ago an investor invested $28 thousand into a fund with a 4% front-end load, a 1.8% annual expense ratio, and a NAV of $33.85 per share. The securities in the fund increased by 8 percent each year, and then the investor sold the fund. What was the investor's total holding period return? Enter answer in percents, accurate to two decimal places.
Two years ago an investor invested $22 thousand into a fund with a 4.6% front-end load,...
Two years ago an investor invested $22 thousand into a fund with a 4.6% front-end load, a 1.9% annual expense ratio, and a NAV of $34.39 per share. The securities in the fund increased by 10.2 percent each year, and then the investor sold the fund. What was the investor's total holding period return? Enter answer in percents, accurate to two decimal places.
"Mutual Funds" Please respond to the following: Justify why a small investor would prefer a stock...
"Mutual Funds" Please respond to the following: Justify why a small investor would prefer a stock exchange market such as the New York Stock Exchange (NYSE), as compared to the National Association of Securities Dealers Automated Quotations (NASDAQ). Provide support for your justification. Take a position on the benefits and risks of a balanced fund versus a fixed index fund, indicating if a financial manager is most likely to invest in a balanced fund or a fixed index fund. Support...
Suppose an individual invests $50,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 2 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.90 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 5 percent each...
Suppose an individual invests $25,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 3 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.85 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 8 percent each...
Two years ago an investor invested $28 thousand into a fund with a 4% front-end load, a 1.8% annual expense ratio, and a NAV of $33.85 per share. The securities in the fund increased by 8 percent each year, and then the investor sold the fund. What was the investor's total holding period return? Enter answer in percents, accurate to two decimal places.
Two years ago an investor invested $22 thousand into a fund with a 4.6% front-end load, a 1.9% annual expense ratio, and a NAV of $34.39 per share. The securities in the fund increased by 10.2 percent each year, and then the investor sold the fund. What was the investor's total holding period return? Enter answer in percents, accurate to two decimal places.
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