Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
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.
2.
Which of the following is not another name for a redemption fee?
Front-end load. Front-end loads are charged when you buy shares, not when you redeem them.
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.
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.
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.