Mutual funds can effectively charge ales fees in one of three ways: front-end lo

Mutual funds can effectively charge ales fees in one of three ways: front-end load fees 12b-1 (i.e. annual) fees or deferred (i.e. back-end) load fees. Assume that the SAS Fund offers its investors the choice of the following sales fee arrangements:(1) a 3% front-end load (2) a 0.50 percent annual deduction or (3) a 2 percent back-end load paid at the liquidation of the investors position. Also assume that SAS Fund averages NAV growth of 12 percent peryear.A. If you start with $100000 in investment capital calculate wha an investment in SAS would be worth in 3 years under each of the proposed sales fee schemes. Which scheme would you choose?B. If your investment horizon were 10 years would your answer in part A change? Demonstrate why or why not.C. Explain the relationship between the timing of the sales charge and your investment horizon. In general if you intend to hold your position for a long time which fee arrangement would you prefer?