SIE practice questionmedium12b-1 Fees
If a mutual fund charges a 12b-1 fee as part of its expense ratio, the fee is used for which expense?
- ADistribution and shareholder servicing expenses✓ Correct answer
- BState and federal tax payments
- CLegal settlement costs
- DFund manager’s salary exclusively
Explanation
Why A — Distribution and shareholder servicing expenses
A is correct; 12b-1 fees cover certain distribution and servicing costs. B, C, and D are not appropriate uses of 12b-1 fees under SEC rules.
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