Question: Suppose you are considering investing 1 000 in a load fund
Suppose you are considering investing $1,000 in a load fund that charges a fee of 8 percent, and you expect your investment to earn 15 percent over the next year. Alternatively, you could invest in a no-load fund with similar risk that charges a 1 percent redemption fee. You estimate that this no-load fund will earn 12 percent. Given your expectations, which is the better investment and by how much?
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