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You Are Considering Investing in a No-Load Mutual Fund That

Question 27

Multiple Choice

You are considering investing in a no-load mutual fund that focuses on growth stocks or in an index fund based on the TSX.The growth stocks fund had a five year average annual return of 11 percent with MER of 2.6 percent.The index fund had a five year average annual return of 11 percent with MER of 1.1 percent.Assuming equal risk,you should buy


A) the index fund because it has a lower MER.
B) the growth fund because its portfolio performed better.
C) some of both,for diversification,as they performed equally.
D) neither,because the expenses are too high for funds of this type.

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