The Component of Expense Ratios That Includes a Fee Charged

question 100

Multiple Choice

The component of expense ratios that includes a fee charged by some mutual funds to pay brokers is

• A) a management fee.
• B) a 12b-1 fee.
• C) an administrative expense.
• D) a referral fee.

---

Definitions:

Pure Play Approach

A business strategy in which a company focuses exclusively on one particular product or service to gain a competitive advantage.

Subjective Risk

The perceived level of risk based on an individual's personal judgment, as opposed to objectively measured risk.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that has priority over common stock dividends.

Market Risk Premium

The additional return an investor expects for holding a risky market portfolio instead of risk-free assets.