Answer:
C. $12,000
Explanation:
additional earnigns for active management:
800,000 x 0.02% = 16,000
expected active management cost:
800,000 x 0.5% = 4,000
net gain: 12,000
At most, we can spend 12,000 dollars.
Up to this point, the expense are cover by the additional return. bove this threshold the fund will incur in losses from the active management
