You Are Considering Investing in One of Several Mutual Funds

question 68

Multiple Choice

You are considering investing in one of several mutual funds. All the funds under consideration have various combinations of front-end and back-end loads and/or 12b-1 fees. The longer you plan on remaining in the fund you choose, the more likely you will prefer a fund with a ________ rather than a ________, everything else equal.

• A) 12b-1 fee; front-end load
• B) front-end load; 12b-1 fee
• C) back-end load; front-end load
• D) 12b-1 fee; back-end load

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Definitions:

Statute of Frauds

A legal principle requiring certain contracts to be in writing to be legally enforceable, such as contracts for the sale of land.

Consideration

The value (such as money, service, or goods) that is promised by one party to another in exchange for performing or promising to perform an act.

Conditional Acceptance

An agreement to accept an offer based on specific conditions being met.

Equitable Estoppel

A legal doctrine preventing a party from denying or asserting anything to the contrary of what has been established as truth, due to previous actions, conduct, or statements.