Investments, tenth edition

 Portfolio,  and  Nuts and Bolts ) to answer the following questions: 

   

a.  Which fund has the best expense ratio?  

   

b.  Which funds have the lowest Morningstar Risk rating?  

   

c.  Which fund has the best 3-year return? Which has the best 10-year return?  

   

d.  Which fund has the lowest turnover ratio? Which has the highest?  

   

e.  Which fund has the longest manager tenure? Which has the shortest?  

   

f.  Do you need to eliminate any of the funds from consideration due to a minimum 

initial investment that is higher than you are capable of making?     

   2.  Based on what you know about the funds, which one do you think would be the best 

one for your investment?  

   3.  Select up to five funds that are of the most interest to you. Click on the button that says 

 Score These Results.  Customize the criteria listed by indicating their importance to you. 

Examine the score results. Does the fund with the highest score match the choice you 

made in part 2?   

bod61671_ch04_092-116.indd   115

bod61671_ch04_092-116.indd   115

6/18/13   8:35 PM

6/18/13   8:35 PM

Final PDF to printer

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116 

P A R T   I

 Introduction

   1.     NAV 5

$2,877.06 2 $14.73

95.50

5 $29.97   

   2.  The net investment in the Class A shares after the 4% commission is $9,600. If the fund earns a 

10% return, the investment will grow after  n  years to $9,600  3  (1.10) 

 n 

 . The Class B shares have 

no front-end load. However, the net return to the investor after 12b-1 fees will be only 9.5%. 

In addition, there is a back-end load that reduces the sales proceeds by a percentage equal to 

(5 – years until sale) until the fifth year, when the back-end load expires.