Which of the Following Is Not Correct About the 12b-1

question 99

Multiple Choice

Which of the following is not correct about the 12b-1 fee?

• A) It is also known as a distribution fee.
• B) A no-load fund can charge a 12b-1 fee of up to 0.25% of its assets.
• C) It is often an ongoing fee that is charged on an annual basis.
• D) It needs to be disclosed in the annual report but not in the prospectus.
• E) It is used to defray the costs of advertising and marketing a mutual fund and commissions paid to a broker who sold shares in the mutual fund.

---

Definitions:

Social Security

A government program that provides monetary assistance to people with inadequate or no income, primarily focused on retirees, disabled individuals, and survivors of deceased workers.

Medicare

In the United States, Medicare is a government-run health insurance scheme designed for individuals who are 65 years of age or older, along with certain younger individuals who have disabilities.

Employee Benefits Expense

Costs incurred by a company to provide benefits to its employees, such as health insurance, retirement plans, and sick leave.

Medical Care

The provision of services by healthcare professionals to maintain, improve, or manage the health of individuals.