An investor invests $100,000 in a mutual fund that has a 5 percent front-end load, charges a management fee of 0.5 percent, and a 12b-1 fee of 0.25 percent.The investor plans to leave the investment for one year.What is the dollar amount of the total shareholder cost?

Question

Quizplus · Accepted Answer

The front-end load is $5,000 (5% of $100,000). The management fee and 12b-1 fee are based on the remaining $95,000 after the front-end load. The management fee is $475 (0.5% of $95,000) and the 12b-1 fee is $237.50 (0.25% of $95,000). The total cost is $5,000 + $475 + $237.50 = $5,712.50, which rounds to $5,750.

An Investor Invests $100,000 in a Mutual Fund That Has