Asked by Ronald Blair on Jun 09, 2024
Verified
________ fund is defined as one in which the fund charges a sales commission to either buy into or exit from the fund.
A) A load
B) A no-load
C) An index
D) A specialized-sector
Sales Commission
A payment made to a salesperson or broker for facilitating a sale, typically calculated as a percentage of the sale price.
Load Fund
A mutual fund that charges a fee (load) for buying or selling shares, in addition to the management fees.
- Identify the costs and fees associated with mutual funds, including loads, 12b-1 fees, and expense ratios.
Verified Answer
BV
Bradon VisickJun 10, 2024
Final Answer :
A
Explanation :
A load fund is one in which the fund charges a sales commission, also known as a load fee or sales charge, to investors either to buy into or exit from the fund. This fee is charged on top of the fund's expense ratio and can be a significant cost for investors. Load funds are often sold through brokers or financial advisors who receive a portion of the load fee as compensation for their services. In contrast, no-load funds do not charge a sales commission and can be bought or sold directly by investors.
Learning Objectives
- Identify the costs and fees associated with mutual funds, including loads, 12b-1 fees, and expense ratios.