Test your knowledge

Choose wisely. There is only one correct answer to each question.

Keep studying!

Review your answers below to learn more.

Redemption fees cover the _______ of mutual fund shares.

Choose wisely. There is only one correct answer.

Buying

Maintaining

Selling

Selling. Redemption fees are charged when you sell, or redeem, shares back to a fund.

Which class of mutual fund shares includes charges in addition to sales loads?

Choose wisely. There is only one correct answer.

Class A

Class B

Class C

Classes A and B

Class C. In addition to a small front-end load, class C shares include other fees (such as marketing costs).

Why might you as an investor favor low-cost funds?

Choose wisely. There is only one correct answer.

Because the less money you pay in expenses, the more money that goes to you

Because low-cost funds tend to perform better than high-cost funds

Both of the above

None of the above

Both of the above. Because the less the fund charges, the more you get to keep, and the better your returns tend to be.

A mutual fund may legally charge 12b-1 fees up to 1.25 percent of a mutual fund's assets.

Choose wisely. There is only one correct answer.

True

False

False. The legal limit is 1 percent per year.

What is the name of the expense that compensates those who administer a mutual fund?

Choose wisely. There is only one correct answer.

Exchange fee

Sales charge

Management fee

Sales load on reinvested dividends

Management fee. This fee pays for those who run funds.

© Copyright 2024 Morningstar, Inc. All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. In addition, we encourage you to read this important disclosure.