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Funds 107: Mutual Fund Expenses

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1.
Sales charges cover the ________ of mutual fund shares.
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Buying and selling. Sales charges are levied for both buying and selling shares.
2.
Why might you as an investor favor low-cost funds?
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Both of the above. Because the less the fund charges, the more you get to keep, and the better your returns tend to be.
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.
Redemption fees cover the _______ of mutual fund shares.
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Selling. Redemption fees are charged when you sell, or redeem, shares back to a fund.
5.
If you transfer money from mutual fund A into mutual fund B, you may be charged a(n) _______ fee.
Choose wisely. There is only one correct answer.
Exchange. Exchange fees cover the movement of money between funds.