The figure given below shows the demand curves [D 1 and D 2 ] and the supply curve [S 1 ] of capital.Figure 17.1

-Compute the actual investment in a mutual fund carrying a front-end load of 10 percent on a sum of $10,000 invested by an individual.

Question

The figure given below shows the demand curves [D 1 and D 2 ] and the supply curve [S 1 ] of capital.Figure 17.1
 
-Compute the actual investment in a mutual fund carrying a front-end load of 10 percent on a sum of $10,000 invested by an individual.

Quizplus · Accepted Answer

The figure given only shows the demand and supply curves for capital and is not relevant to the computation of investment in a mutual fund with a front-end load. Therefore, the best choice is D, which is the value of the investment after the front-end load is deducted from the initial investment of $10,000. The front-end load of 10 percent on $10,000 equals $1,000, so the actual investment would be $10,000 - $1,000 = $9,000.

The Figure Given Below Shows the Demand Curves [D1 and D2]

The Figure Given Below Shows the Demand Curves [D₁ and D₂]