Question: Reflect excel value. =( ) Assume that you have made a $25,000 investment in a mutual fund that charges an 8.5% load. The expense ratio

 Reflect excel value. =( ) Assume that you have made a

Reflect excel value. =( )

Assume that you have made a $25,000 investment in a mutual fund that charges an 8.5% load. The expense ratio of the fund is 1.25% per year. (These two sources of expense are the only two that you will experience.) The objective of the fund is to outperform the S\&P 500. It is now five years later and an S\&P 500 index fund has provided a geometric mean return of 9% per year over this period after all fees and expenses. You have made no contributions or withdrawals from your mutual fund investment during this time. What rate of return must you have earned on your fund to merely break even with the index fund? You must create a formula solution to this problem in cell C15. However, to check work you might consider using Goal Seek. Be sure not to disturb your answer in C15

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!