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Funds 105: How to Purchase a Mutual Fund

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1.
With no-transaction fee networks, a mutual fund investor pays for the service _______.
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Indirectly. Since these networks charge mutual funds to participate in them, the funds pass their cost along to investors through the expense ratio.
2.
A justification that some do-it-yourself mutual fund investors use for buying no-load funds is that _______.
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Since they are not getting investment advice in return, why pay a commission? For this reason, many prefer no-load funds.
3.
Which of the following is not a way financial advisors are compensated?
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A part of the fund manager's fee. Advisors can charge you a fee or get a commission from products, such as mutual funds, that they sell. They can also charge a combination of fees and commissions. They cannot, however, take a portion of the fund manager's fee.
4.
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.
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.