You are considering investing in a no-load mutual fund with an annual expense ratio of .6% and an annual 12b-1 fee of .75%. You could also invest in a bank CD paying 6.5% per year. What minimum annual rate of return must the fund earn to make you better off in the fund than in the CD?
A) 7.1%
B) 7.45%
C) 7.25%
D) 7.85%
Correct Answer:
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