SIE practice questionmediumMutual Funds - Exchange Privileges
A mutual fund family offers exchange privileges. This means an investor can:
- AExchange shares for guaranteed principal protection
- BExchange shares for higher-yielding bonds
- CSwitch from one fund to another within the same family, often without incurring a sales charge✓ Correct answer
- DRedeem shares only at IPO price
Explanation
Why C — Switch from one fund to another within the same family, often without incurring a sales charge
Exchange privileges allow switching among funds in the same family, often at NAV. It does not involve bond swaps, protections, or IPO pricing.
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