what will be the value of a 10 000 investment in class a and class b shares if the s 665398
The Equity Fund sells Class A shares with a front end load of 4% and Class B shares with 12b 1 fees of .5% annually as well as back end load fees that start at 5% and fall by 1% for each full year the investor holds the portfolio (until the fifth year). Assume the rate of return on the fund portfolio net of operating expenses is 10% annually. What will be the value of a $10,000 investment in Class A and Class B shares if the shares are sold after (a) 1 year, (b) 4 years, (c) 10 years? Which fee structure provides higher net proceeds at the end of the investment horizon?