SIE practice questionmediumMutual Funds - 12b-1 Fees
A mutual fund charges a 0.40% 12b-1 fee. Which of the following best describes this charge?
- AAn annual fee covering marketing and distribution expenses✓ Correct answer
- BA one-time fee when purchasing fund shares
- CA fee only for exchanging shares between funds
- DA fee charged only at redemption
Explanation
Why A — An annual fee covering marketing and distribution expenses
The 12b-1 fee is an ongoing annual charge for marketing/distribution, not a purchase (B), redemption (D), or exchange (C) fee.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Companies & Packaged Products questions
- A client redeems shares in an open-end mutual fund. When is the price set for the redemption?
- If an investor purchases $48,000 of a mutual fund, and the breakpoint for a lower sales charge is $50,000, which action…
- Which of the following is a true statement about ETF share creation and redemption?
- A mutual fund has $150 million in assets, $10 million in liabilities, and 7 million shares outstanding. What is the NAV…