Supposed that after completed your MBS degree specialized in finance, you will open financa consultancy. As a financial consultant, you should give advice to your clients who want to invest 100 million in a mutual fund that charged a 3 percent load fee and 1.5 percent operating fee, but th client confused which alternative is better for investment whether to invest in a mutual fund or fine deposit in the bank. Bank pays 12 percent interest on time deposit and the investment time horizon three years. What annual return would the mutual fund have earned to produce to equal the vale that your clients' initial investment would have earned in a deposited amount? Assume annual compounding of income and no taxes. How do you convince your client to select which alternative is better for investment and why?

Supposed that after completed your MBS degree specialized in finance, you will open financa consultancy. As a financial consultant, you should give advice to your clients who want to invest 100 million in a mutual fund that charged a 3 percent load fee and 1.5 percent operating fee, but th client confused which alternative is better for investment whether to invest in a mutual fund or fine deposit in the bank. Bank pays 12 percent interest on time deposit and the investment time horizon three years. What annual return would the mutual fund have earned to produce to equal the vale that your clients' initial investment would have earned in a deposited amount? Assume annual compounding of income and no taxes. How do you convince your client to select which alternative is better for investment and why?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter15: Mutual And Exchange Traded Funds

Section: Chapter Questions

Problem 3LTAI

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