[Solved] Rita Is Choosing Between Two Mutual Funds

Question 189
Multiple Choice
Question 189

Rita is choosing between two mutual funds. While both funds have the same risk level, Fund A has historical returns of 9.3% and Fund B has historical returns of 8.5%. Fund A also has an expense ratio of 1.1% while Fund B has an expense ratio of 0.4%. Based on this information, which fund should Rita choose and why?

A) Fund A because its historical return is higher: 9.3% vs. 8.5%.
B) Fund A because its after-fee return is higher: 10.4% vs. 8.9%.
C) Fund A because its after-fee return is higher 8.2% vs. 8.1%.
D) Fund A because its expense ratio is higher 1.1% vs. 0.4%.

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