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Funds 107: Mutual Fund Expenses

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1.
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.
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True. Bond fund returns don't vary all that much. Many investors find that every dollar going to expenses will hurt their return noticeably.
2.
You may be assessed an exchange fee when you put your earned dividends back into your mutual fund.
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False. You may be charged a sales load on reinvested dividends, but not an exchange fee.
3.
If a mutual fund does not charge a sales load, it may compensate its brokers through 12b-1 fees.
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True. Some people call 12b-1 fees hidden loads because they compensate brokers in this way.
4.
Front-end sales loads apply when you _______ mutual fund shares.
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Buy. Front-end loads, or sales charges, are charged when you buy mutual fund shares.
5.
Which of the following is not another name for a redemption fee?
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Front-end load. Front-end loads are charged when you buy shares, not when you redeem them.