Question $2(25$ Marls$)$:

Bell Ltd sells two types of shares, $C+$ and $C++.$ C$+$ shares are sold with front$-$end load fee of $10\%$ whilst

Type C$++$ shares are not subject to front$-$end load fee but are charged to investment management fee of

$5\%$ per annum as well as exit $($back$-$end load$)$ fee that start at $15\%$ and reduce by $3\%$ for each fall year

the investor holds the portfolio $($until the $5^i$ year$).$ The annual rate of retum for both types of shares is

$17\%.$

$($a$)$ Calculate the value of Rs $500,000$ investment made by investor Mr Leaf in Type C$+$ shares if the

shares are disposed after $($i$)1$ year and $($ii$)4$ years.

$[8$ Marks$]$

$($b$)$ Calculate the value of Rs $500,000$ investment made by investor Mrs Beans in Type C$++$ shares

if the shares are disposed after $($i$)1$ year and $($ii$)4$ years.

$[14$ Marks$]$

$($c$)$ As an analyst, which types of shares will you recommend the investor to buy?

$[3$ Marks$]$