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Funds 107: Mutual Fund Expenses

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1.
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.
2.
If you transfer money from mutual fund A into mutual fund B, you may be charged a(n) _______ fee.
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Exchange. Exchange fees cover the movement of money between funds.
3.
A mutual fund may legally charge 12b-1 fees up to 1.25 percent of a mutual fund's assets.
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False. The legal limit is 1 percent per year.
4.
A 1.5% expense ratio is acceptable for which type of fund?
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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.
Which class of mutual fund shares includes charges in addition to sales loads?
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Class C. In addition to a small front-end load, class C shares include other fees (such as marketing costs).