Question

Christina also invests $10,000, but instead chooses to invest into a passively managed index fund that is linked to the S&P 500, with an expense ratio of 0.2%. Her investment also earns a 7% rate of return.

Answer 1

Data and Calculations:Investment in mutual fund = $10,000Annual expense ratio = 1.3%Rate of return on investment = 7%b) Annual return on investment = $700 ($10,000 * 7%)c) Annual fees for her actively managed mutual fund = $130 ($10,000 * 1.3%)d) At the end of the year, the total value (after fees) of Alizeh's mutual fund:Investment in mutual fund = $10,000Annual return on investment = $700Annual fees for mutual fund = ($130)Total value =                         $10,570Step-by-step explanation:got an A