Question: 6 . You are considering a mutual fund with a 4 % front - end load and an operating expense 0 . 5 % .

6. You are considering a mutual fund with a 4% front-end load and an operating expense 0.5%. You can also instead invest in a bank C.D. paying 6% interest.
a) If you plan to invest for two years, what annual rate of return must the mutual fund portfolio earn for you to be better off than investing in the C.D.?(Hint: calculate mutual fund and C.D. separately, use the unknow variable to set up an equation)
b) What would be your answer if you plan to invest for five years?

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