CH17.1.a Number of Shares Purchased. Megan invested $5,350 in a mutual fund at a
ID: 2768241 • Letter: C
Question
CH17.1.a Number of Shares Purchased. Megan invested $5,350 in a mutual fund at a time when the price per share was $25. The fund has a load fee of $350. How many shares did she purchase?
CH17.1.b Number of Shares Purchased. From CH17.1.a, if Megan had invested the same amount of money in a no-load fund with the same price per share, how many shares could she have purchased?
Please show the work. Thank you
CH17.3.b. Estimating Returns From CH17.1.b, What would Megan's return be in the no load fund case, assuming she sells the shares for the same $30 per share?Explanation / Answer
1a)
Amount invested = Number of shares×Share price+Front end load
$5,350 = Number of shares×$25+$350
Number of shares = 200
1b)
Amount invested = Number of shares×Share price
$5,350 = Number of shares×$25
Number of shares = 214
1c)
Rate of return:
= (Sale price-Purchase price)÷Purchase price
= ($30-$25)÷$25
= 20%