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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.
You may be assessed an exchange fee when you put your earned dividends back into your mutual fund.
False. You may be charged a sales load on reinvested dividends, but not an exchange fee.
3.
Which of the following is not a cost covered by a mutual fund's 12b-1 fees?
Management expenses. These are not covered by 12b-1 fees, but by their own fees.
4.
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.
5.
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.
