The Core Concept That Is Central to Understanding the Time-Value

question 73

Multiple Choice

The core concept that is central to understanding the time-value of money is

• A) GDP growth.
• B) inflation.
• C) interest rate.
• D) exchange rate.

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Definitions:

12b-1 Fee

A fee found in the expense ratio of some mutual funds, meant to cover marketing, distribution, and other costs.

Front-end Load

An upfront sales charge investors pay when they purchase mutual fund shares, which reduces the amount of the investment.

Back-end Load

A fee paid by investors when selling mutual fund shares, typically decreasing over time the longer shares are held, designed to discourage quick withdrawals.

Front-end Load

A sales charge or commission that investors pay upfront when purchasing shares of a mutual fund or investment, typically used to compensate brokers.