A fund is expected to earn 12% while the SPDR is expected to earn 9%. Assume the SPDR has no transaction or tracking costs and that the two funds have comparable risk. Given the MER of the fund is 2% of assets under management (AUM) at year start, what is the maximum combined feeds on the ISC/DSC of the fund such that an investor would still prefer it over the SPDR?
a. Cannot be computed with the information provided
b. 2%
c. 100 bps
d. 0%
e. -1%
