IFIC Chapter 16 questions with correct
answers
1. SALES CHARGES / COMMISSIONS
2. Management Fees - fees payable by the fund to the fund's service providers - correct answer
✔✔Mutual funds incur 2 types of fees:
1.
2.
notes - correct answer ✔✔MGT fees deducted from the fund's return to pay for admin. 0.5% to 3% per
year
trailer fee - correct answer ✔✔This is an annual fee based on a fixed percentage of assets. Paid to MF
reps to service existing clients rather than concentrate on making new sales
E. - correct answer ✔✔Which of the following isn't a fee paid by investor?
A. acquistion fee
B. redemption fee
C. Transfer Fee
D. Frequent Trading Charge
E. Operating Expenses
Selling/Redemption Price:
$14.70
15-0.03x10 - correct answer ✔✔Investor purchases units in a MF at NAVPS of $10- if investor decides to
sell units in 4th year when NAVPS is $15, the fund will charge a back-end 3% load or commission. (based
on original purchase)
answers
1. SALES CHARGES / COMMISSIONS
2. Management Fees - fees payable by the fund to the fund's service providers - correct answer
✔✔Mutual funds incur 2 types of fees:
1.
2.
notes - correct answer ✔✔MGT fees deducted from the fund's return to pay for admin. 0.5% to 3% per
year
trailer fee - correct answer ✔✔This is an annual fee based on a fixed percentage of assets. Paid to MF
reps to service existing clients rather than concentrate on making new sales
E. - correct answer ✔✔Which of the following isn't a fee paid by investor?
A. acquistion fee
B. redemption fee
C. Transfer Fee
D. Frequent Trading Charge
E. Operating Expenses
Selling/Redemption Price:
$14.70
15-0.03x10 - correct answer ✔✔Investor purchases units in a MF at NAVPS of $10- if investor decides to
sell units in 4th year when NAVPS is $15, the fund will charge a back-end 3% load or commission. (based
on original purchase)
