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1.
A 1.5% expense ratio is acceptable for which type of fund?
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.
2.
You may be assessed an exchange fee when you put your earned dividends back into your mutual fund.
False. You may be charged a sales load on reinvested dividends, but not an exchange fee.
3.
Which of the following is not a cost covered by a mutual fund's 12b-1 fees?
Management expenses. These are not covered by 12b-1 fees, but by their own fees.
4.
Redemption fees cover the _______ of mutual fund shares.
Selling. Redemption fees are charged when you sell, or redeem, shares back to a fund.
5.
Sales charges cover the ________ of mutual fund shares.
Buying and selling. Sales charges are levied for both buying and selling shares.