An investor purchases fund shares with a 3 percent front-end load and expects to hold the shares for 10 years.The fund has a total fund expense ratio (including 12b-1 fees)of 1 percent per year.The annual total shareholder cost for this fund is _______ per year.

Question

Quizplus · Accepted Answer

0.3 annualized load + 1.0 percent annual fund expenses = (3.00 percent front-end load F1F1F1S1F1F1F10 10 year holding period)+ 1.0 = 1.3 percent.

An Investor Purchases Fund Shares with a 3 Percent Front-End