Suppose you consider investing $5,000 in a load fund from which a fee of 8% is deducted and you expect the fund to earn 12% over the next year. Alternatively, you could invest in a no load fund which is expected to earn 10% and which takes a 1/2% redemption fee. Which is better and by how much?
A) Load fund by $320.50
B) Load fund by $575.50
C) Funds are equal
D) No load fund by $320.50
E) No load fund by $575.50
Correct Answer:
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