CFA Practice Question
Which of these funds typically charge a sales fee when the fund is sold?
II. Funds under 12b-1 plans
III. Low-load funds
IV. No-load funds
V. Closed-end funds
I. Funds with contingent deferred sales loads
II. Funds under 12b-1 plans
III. Low-load funds
IV. No-load funds
V. Closed-end funds
A. I and II
B. I and III
C. IV and V
Explanation: Funds with contingent deferred sales loads charges a sales fee if the shares are sold before a certain duration; low-load funds charge a small sales fee. Not all funds under the 12b-1 plans necessarily charge sales fees. Closed-end funds trade at a discount usually to the NAV.
User Contributed Comments 3
| User | Comment |
|---|---|
| whipp | "C" shares are an example of "low-load" fund shares |
| ontrack | We can eliminate all choices except B since low-load funds will charge some sales fee and only B has option 3 |
| Friso | Book 5, page 20: Closed end funds may also trade at a premium when investors believe the portfolio securities are undervalued. I don't understand why this line made it in the explanation, it can also be left out. |