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Exam Code: 0.5 - 1 = 13.52% per year, annually compounded. Hence, for a 2 year horizon, you should select Alpha, since Beta has an annual rate of 13%.


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NEW QUESTION: 3
Alpha is a 9% load-fund, which you expect to have an annual rate of return of about 19% over the next 2 years. Beta is a no-load fund, which is expected to have a rate of return of around 13%. If your investment horizon is 2 years, which fund should you invest in and what is your expected net rate of return per year?
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Explanation/Reference:
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