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You are going to invest in a stock mutual fund wit...

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Question

You are going to invest in a stock mutual fund with a 4.5 percent front-end load and a 1.6 percent expense ratio. You also can invest in a money market mutual fund with a 3.8 percent return and an expense ratio of 0.2 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon is 8 years? I get how to set it up just cant figure out the rest. (1 + 0.038 ? 0.002)^2 = (1 ? 0.045)(1 + R ? 0.016)^2 (1+ 0.038 ? 0.002)^8 = (1 ? 0.045)(1 + R ? 0.016)^8

 

Paper#11820 | Written in 18-Jul-2015

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