At 55 years of age you may want to reduce risk by switching from very aggressive funds to balanced funds.If your portfolio is worth $498 000 and your family fund company charges you a 2 percent switch fee and 3 percent redemption fee,what will it cost to change funds?

Question

Quizplus · Accepted Answer

To calculate the switch cost, we need to find out the current value of the switch fee and redemption fee.

Switch fee = 2% of $498,000 = $9,960

Redemption fee = 3% of $498,000 = $14,940

Total cost = Switch fee + Redemption fee = $9,960 + $14,940 = $24,900

Therefore, the best choice is B, which is $24,900, as it represents the total cost of changing funds.

At 55 Years of Age You May Want to Reduce