SIE practice questionhardMutual Funds - Back-End Load
Which is a defining feature of a mutual fund with a back-end sales load (Class B share)?
- ASales charge is paid if shares are redeemed within a certain period✓ Correct answer
- BSales charge is paid at the time of purchase
- COngoing 12b-1 fee is waived
- DShares can only be purchased by institutions
Explanation
Why A — Sales charge is paid if shares are redeemed within a certain period
Back-end loads are payable upon redemption, usually decreasing over time. Front-end loads are paid at purchase (B), 12b-1 fees are not necessarily waived (C), and Class B shares are available to individuals (D).
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