Higher net proceeds at the end

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Question:

The equity funds sell class A Share with a front load of 5% and class B share with fees of 0.5% annually as well as back -end load fees that start at 5% and fall by 1% for each full year the investor holds portfolio (Until the tenth year). Assume the rate of return on fund portfolio net of operating expenses is 10% annually.

Required

i. What is the value of $100,000 investments in Class A and B shares if the share are sold after 1 year, 4 years and 10 years?

ii. Which fee structure provides higher net proceeds at the end of each of (1) above investment horizons? Briefly comment on your findings

Reference no: EM132265973

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