Series 7 practice questioneasyPackaged Products — Mutual Funds
An investor who signs a letter of intent (LOI) for mutual fund purchases has how long to fulfill the commitment?
- A6 months
- B24 months
- C18 months
- D13 months✓ Correct answer
Explanation
Why D — 13 months
A letter of intent allows an investor to receive breakpoint discounts based on a commitment to invest a specified amount over a 13-month period. The LOI can be backdated up to 90 days to include prior purchases. If the investor does not fulfill the LOI, the fund will retroactively charge the higher sales load.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 755+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Information & Recommendations questions
- Which feature allows a mutual fund investor to move money between funds within the same fund family at NAV without…
- A registered representative recommends that a client invest $48,000 in a mutual fund when the next breakpoint is at…
- A client owns Class C shares purchased 8 months ago. If the fund charges a 1% CDSC for redemptions within 12 months,…
- A client wants to invest $50,000 in the ABC Growth Fund (Class A). The breakpoint schedule shows: under $25,000 = 5.75%…