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.
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