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load versus no-load funds

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An open-end fund is set up to charge a load. Its NAV is $8.72 and its offer price is $ 9.25.
? (a) What is the dollar value of the load commission?
? (b) What percent of the offer price does the load represent?
? (c) Do load funds necessarily outperform no-load funds?
? (d) How do no-load funds earn a return if they do not charge a commission?

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The expert examines load versus no-load funds.

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Hi there,

Here are your answers:

a) The dollar value of the load commission can be calculated by simply subtracting the NAV from the offer price. The answer is $0.53.
b) What percent of the offer price does the load represent? 0.53 / 9.25 = 5.7%
c) Do load funds necessarily outperform no-load funds? I would say, not necessarily. Just because a commission is being ...

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