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1.
Which class of mutual fund shares includes charges in addition to sales loads?
Class C. In addition to a small front-end load, class C shares include other fees (such as marketing costs).
2.
A redemption fee that falls from 4 percent one year to 3 percent the next year and 2 percent the year after that is a contingent deferred sales charge.
True. Contingent deferred sales charges drop a little each year.
3.
A mutual fund may legally charge 12b-1 fees up to 1.25 percent of a mutual fund's assets.
False. The legal limit is 1 percent per year.
4.
If you transfer money from mutual fund A into mutual fund B, you may be charged a(n) _______ fee.
Exchange. Exchange fees cover the movement of money between funds.
5.
One reason to choose a low-cost bond fund over a higher-cost bond fund is that bond fund returns don't differ very much anyway, so you may as well save on expenses.
True. Bond fund returns don't vary all that much. Many investors find that every dollar going to expenses will hurt their return noticeably.
