SIE practice questionmediumMutual Funds - Breakpoints
If an investor purchases $48,000 of a mutual fund, and the breakpoint for a lower sales charge is $50,000, which action can help qualify the investment for the lower sales charge?
- ASwitching to a different fund family
- BReinvesting dividends in the fund
- CSigning a Letter of Intent (LOI) to invest $2,000 more within 13 months✓ Correct answer
- DRequesting load-waived shares
Explanation
Why C — Signing a Letter of Intent (LOI) to invest $2,000 more within 13 months
An LOI allows the investor to reach the breakpoint over time. Dividend reinvestment (B) does not count toward breakpoints, nor does switching funds (C) or requesting waived loads (D) unless eligible.
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