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1.
Redemption fees cover the _______ of mutual fund shares.
Selling. Redemption fees are charged when you sell, or redeem, shares back to a fund.
2.
What is the name of the expense that compensates those who administer a mutual fund?
Management fee. This fee pays for those who run funds.
3.
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.
4.
A mutual fund may legally charge 12b-1 fees up to 1.25 percent of a mutual fund's assets.
False. The legal limit is 1 percent per year.
5.
Front-end sales loads apply when you _______ mutual fund shares.
Buy. Front-end loads, or sales charges, are charged when you buy mutual fund shares.