SIE practice questionhardMutual Funds - Breakpoints
An RR recommends that a client divide investments among several mutual fund families to 'avoid breakpoints.' This practice is:
- AThe only way to reduce sales charges
- BRecommended by FINRA
- CProhibited as breakpoint sales✓ Correct answer
- DMandatory for diversification
Explanation
Why C — Prohibited as breakpoint sales
Recommending purchases below the breakpoint to maximize sales charges is prohibited (breakpoint sales). B, C, and D are false.
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