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1.
Buying mutual funds from a single, large fund family will always provide you a diverse range of offerings to choose from.
False. Some families, despite being large, specialize in a narrow range of funds.
2.
No-transaction fee networks charge _______.
Fund companies for being part of the network. There are no up-front costs with a no-transaction fee network. The networks charge funds for being included, and funds very often pass along these charges to all shareholders (whether or not they invest via a supermarket) in their expense ratios.
3.
A justification that some do-it-yourself mutual fund investors use for buying no-load funds is that _______.
Since they are not getting investment advice in return, why pay a commission? For this reason, many prefer no-load funds.
4.
When you buy a load fund through an advisor, where does the load that you pay go?
To your advisor. Loads are commissions that are paid to advisors. Fund managers receive a portion of the fund's management fee.
5.
With no-transaction fee networks, a mutual fund investor pays for the service _______.
Indirectly. Since these networks charge mutual funds to participate in them, the funds pass their cost along to investors through the expense ratio.
