Funds Beginner: Mutual Fund Expenses

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1.
Front-end sales loads apply when you _______ mutual fund shares.
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Buy. Front-end loads, or sales charges, are charged when you buy mutual fund shares.
2.
Why might you as an investor favor low-cost funds?
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Both of the above. Because the less the fund charges, the more you get to keep, and the better your returns tend to be.
3.
A mutual fund may legally charge 12b-1 fees up to 1.25 percent of a mutual fund's assets.
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False. The legal limit is 1 percent per year.
4.
Redemption fees cover the _______ of mutual fund shares.
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Selling. Redemption fees are charged when you sell, or redeem, shares back to a fund.
5.
You may be assessed an exchange fee when you put your earned dividends back into your mutual fund.
Choose wisely. There is only one correct answer.
False. You may be charged a sales load on reinvested dividends, but not an exchange fee.