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Funds 107: Mutual Fund Expenses

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1.
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.
2.
What is the name of the expense that compensates those who administer a mutual fund?
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Management fee. This fee pays for those who run funds.
3.
Which of the following is not a cost covered by a mutual fund's 12b-1 fees?
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Management expenses. These are not covered by 12b-1 fees, but by their own fees.
4.
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.
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True. Contingent deferred sales charges drop a little each year.
5.
Front-end sales loads apply when you _______ mutual fund shares.
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Buy. Front-end loads, or sales charges, are charged when you buy mutual fund shares.
DONE