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

question 84

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 you shares in the mutual fund.

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Definitions:

Trade Receivables

Amounts owed to a business by its customers as a result of the sale of goods or services on credit.

Exchange Notes

Financial instruments or agreements between parties to swap different forms of financial assets, liabilities, or payments agreed upon conditions and terms.

Receivable

An amount of money owed to a business by its customers or clients for goods or services delivered or used but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account that reduces accounts receivable to its net realizable value, representing estimated uncollectible amounts.