Under SEC Rules, the Managers of Certain Funds Are Allowed

question 34

Multiple Choice

Under SEC rules, the managers of certain funds are allowed to deduct charges for advertising, brokerage commissions, and other sales expenses directly from the fund assets rather than billing investors. These fees are known as ________.

• A) direct operating expenses
• B) back-end loads
• C) 12b-1 charges
• D) front-end loads

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Definitions:

Accounts Payable

Liabilities or amounts owed by a company to suppliers for goods and services received but not yet paid for.

Inventory

The total amount of goods and materials held by a company, intended for sale or production.

Investing Transactions

Activities related to the acquisition or disposal of long-term assets and investments not included in cash equivalents within a company.

Cash Flow Statement

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.