The Initial Cost of Investing in Mutual Funds Depends in Part

question 207

Multiple Choice

The initial cost of investing in mutual funds depends in part on

• A) whether the fund is a load or no-load fund.
• B) the risk tolerance of the companies in the fund.
• C) the tax rate on capital gains.
• D) the imposition of government tariffs.

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Definitions:

Overhead

The total cost of running a business that cannot be directly attributed to the production of goods or services, similar to factory overhead but can apply to non-manufacturing costs.

Overhead Allocation Base

A measure or activity, such as direct labor hours or machine hours, used to assign overhead costs to products or services.

Direct Labor Hours

The total hours worked directly on a product or service by employees in the production process.

Overhead Rate

A measure used to allocate overhead costs to produced goods, calculated by dividing total overheads by an allocation base, such as labor hours.