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Funds 105: How to Purchase a Mutual Fund

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1.
Investing with one of the more diverse fund families or a fund supermarket _______.
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Limits your paperwork. Investing all in one place makes recordkeeping easier and makes moving to and from funds a snap, too. And as long as you stick with one of the largest fund families, you'll have plenty of diversification options, too.
2.
If you use an advisor to buy mutual fund shares for you, he or she will be paid a commission by investing your money in _______.
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Load funds. Load funds come with a sales charge that compensates the advisor for his or her work.
3.
When you buy a load fund through an advisor, where does the load that you pay go?
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To your advisor. Loads are commissions that are paid to advisors. Fund managers receive a portion of the fund's management fee.
4.
Buying mutual funds from a single, large fund family will always provide you a diverse range of offerings to choose from.
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False. Some families, despite being large, specialize in a narrow range of funds.
5.
Buying several mutual funds from one fund family limits your paperwork (account statements, tax statements, etc.)
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True. There is more consolidation of paperwork when you stick with one fund family.