Mutual Fund Trading Costs

question 78

Multiple Choice

Mutual fund trading costs:

• A)are computed as a percentage of a fund's assets.
• B)are generally set at a flat amount per year.
• C)generally include a bonus fee for outperforming an index.
• D)increase in direct relation to the turnover rate.
• E)are the costs paid to brokers in the form of sales commissions.

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Definitions:

Tit-for-Tat Strategy

A strategy in repeated games where a player's move in the current round is the same as the opponent's move in the previous round.

Prisoners' Dilemma

A situation in game theory where two individuals acting in their own self-interest do not produce the optimal outcome, showcasing the conflict between personal and collective rationality.

Tying

Tying is a sales technique where a seller requires the purchaser of one product to also buy another, secondary product.

Monopoly

A market structure in which a single seller controls the entire supply of a product or service, and hence, the price, effectively blocking entry for any competitors.