Suppose an economy is depicted by the expenditure function provided below: C + G + I + X = $300 + 0.80timesY + $350 +
1 answer:
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Answer:
The responses to the given choices can be defined as follows:
Explanation:
Assume is the investment. Each original Class A investment is of the net-front unburden. The portfolio will be worth four years from now:
You will place the total of on class B shares, but only
will be paid
at a rate of
and you'll pay a
back-end load charge if you sell for a four-year period.
After 4 years, your portfolio worth would be:
Their portfolio worth would be: after charging the backend load fee:
When the horizon is four years, class B shares are also the best option.
Class A shares would value from a 12-year time frame:
In this case, no back-end load is required for Class B securities as the horizon is larger than 5 years.
Its value of the class B shares, therefore, is as follows:
Class B shares aren't any longer a valid option in this, prolonged duration. Its impact on class B fees of cumulates over a period and eventually outweighs the
the burden of class A shareholders.