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Funds Beginner: Mutual Fund Sales Loads

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1.
A sales load is the periodic charge you pay for owning mutual fund shares.
Choose wisely. There is only one correct answer.
False. The sales charge applies when you buy or sell shares, but not while you own them.
2.
If you invest $1,000 into a mutual fund that has a 7 percent front-end load, how much money will actually be invested in the fund?
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$930. Seven percent of $1,000 is $70, which is subtracted from the $1,000 to leave you with $930.
3.
You pay a sales load _______.
Choose wisely. There is only one correct answer.
Either A or B. You may pay a sales load either when you buy or sell shares.
4.
You pay a back-end load by sending a check to the mutual fund.
Choose wisely. There is only one correct answer.
False. The back-end load is deducted from the proceeds of the redeemed shares.
5.
By assessing your ________, brokers can help you pick mutual funds that are suitable for you.
Choose wisely. There is only one correct answer.
Risk level. Suitability depends largely on the amount of risk with which you are comfortable.
DONE
Introduction to Mutual Fund Sales Loads What Is a Mutual Fund Sales Load? Mutual Fund Front-End Loads Mutual Fund Back-End Loads What Should Investors Expect from Load Mutual Funds? Summary of Mutual Fund Sales Loads Find out what you learned