Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
A 1.5% expense ratio is acceptable for which type of fund?
A foreign-stock fund. You should expect to pay less for fund types with a narrow range of returns, such as bond or large-cap stock funds. Look for funds with expense ratios of 1% or less. The range of returns is wider for small-cap or foreign funds, so you should expect to pay more.
2.
If a mutual fund does not charge a sales load, it may compensate its brokers through 12b-1 fees.
True. Some people call 12b-1 fees hidden loads because they compensate brokers in this way.
3.
Redemption fees cover the _______ of mutual fund shares.
Selling. Redemption fees are charged when you sell, or redeem, shares back to a fund.
4.
Front-end sales loads apply when you _______ mutual fund shares.
Buy. Front-end loads, or sales charges, are charged when you buy mutual fund shares.
5.
What is the name of the expense that compensates those who administer a mutual fund?
Management fee. This fee pays for those who run funds.
