- Calculate the commission per share for each fund using the formula: \(\text{Commission} = \text{Offer Price} - \text{NAV}\).
- Determine the total commission for 100 shares by multiplying the commission per share by 100.
- Compare the resulting totals for each fund: Upton Group (\(\$49.00\)), Green Energy (\(\$72.00\)), TJH Small-Cap (\(\$62.00\)), and WHI Health (\(\$0.00\)).
- The Green Energy fund has the highest commission, identifying it as the correct option \(\boxed{a}\).
Explanation
- Analysis and Data Overview
We need to identify which fund yields the highest total commission for a purchase of 100 shares. The commission per share is determined by the difference between the Offer Price and the Net Asset Value (NAV). If a fund is marked 'NL' (No Load), the commission is \$0. The total commission for 100 shares is calculated as:
\[\text{Total Commission} = 100 \times (\text{Offer Price} - \text{NAV})\]
- Calculating Total Commissions
We calculate the commission per share for each fund:
- Upton Group: The commission per share is \(\$18.96 - \$18.47 = \$0.49\). For 100 shares, the total commission is \(100 \times \$0.49 = \$49.00\).
- Green Energy: The commission per share is \(\$18.01 - \$17.29 = \$0.72\). For 100 shares, the total commission is \(100 \times \$0.72 = \$72.00\).
- TJH Small-Cap: The commission per share is \(\$19.05 - \$18.43 = \$0.62\). For 100 shares, the total commission is \(100 \times \$0.62 = \$62.00\).
- WHI Health: Marked as 'NL', meaning there is no load, so the commission is \(\$0\). For 100 shares, the total commission is \(\$0.00\).
- Comparison and Conclusion
Comparing the total commissions:
- Upton Group: \(\$49.00\)
- Green Energy: \(\$72.00\)
- TJH Small-Cap: \(\$62.00\)
- WHI Health: \(\$0.00\)
The highest total commission is \(\$72.00\), which corresponds to the Green Energy fund. Thus, option (a) is the correct answer.
Examples
Understanding commission costs is vital when investing in mutual funds. For instance, if you decide to allocate a portion of your savings to different investment vehicles, knowing which ones charge higher entry fees helps in maximizing your returns. By calculating the total cost of ownership, such as the commission over a specific number of shares, you make informed decisions that align with your financial goals and minimize unnecessary expenses.