Series 7 practice questioneasyPackaged Products — Mutual Funds
Which share class of mutual fund typically charges a front-end sales load?
- AClass A shares✓ Correct answer
- BClass B shares
- CClass C shares
- DNo-load shares
Explanation
Why A — Class A shares
Class A shares charge a front-end sales load (commission) at the time of purchase, which reduces the amount of money actually invested. In exchange, Class A shares typically have lower ongoing 12b-1 fees compared to Class B or C shares, making them more cost-effective for larger or longer-term investments.
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