12b-1 Fees

question 29

Multiple Choice

12b-1 fees

• A)are determined as a small percentage of the fund's investable assets.
• B)are annual fees to cover distribution and marketing costs of the fund.
• C)have been approved by the SEC.
• D)are capped at a maximum 0.25 percent for no-load funds.
• E)All of the options.

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Definitions:

Net Present Value

A calculation used to assess the profitability of an investment by determining the difference between the present value of cash inflows and outflows.

Incremental Cash Flows

Additional cash flows from taking on a new project, crucial for analysis in capital budgeting decisions to determine a project's potential profitability.

Capital Budgeting

Analysis techniques concerned with justifying money spent on long-term assets and projects.

Profitability

A measure of the efficiency of a company or investment in generating profit or return compared to its revenue or investment size.