Funds Beginner: Mutual Fund Expenses

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1.
If you transfer money from mutual fund A into mutual fund B, you may be charged a(n) _______ fee.
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Exchange. Exchange fees cover the movement of money between funds.
2.
A 1.5% expense ratio is acceptable for which type of fund?
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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.
3.
If a mutual fund does not charge a sales load, it may compensate its brokers through 12b-1 fees.
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True. Some people call 12b-1 fees hidden loads because they compensate brokers in this way.
4.
Which class of mutual fund shares includes charges in addition to sales loads?
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Class C. In addition to a small front-end load, class C shares include other fees (such as marketing costs).
5.
A redemption fee that falls from 4 percent one year to 3 percent the next year and 2 percent the year after that is a contingent deferred sales charge.
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True. Contingent deferred sales charges drop a little each year.