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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.


Definitions:

Limited Problem Solving

A decision-making process characterized by a consumer engaging in minimal search and deliberation, usually applied to familiar and low-stakes purchases.

Lower-Income

Describes individuals or families that earn significantly less money than the average for their society or community.

Affluent

individuals or groups characterized by having a significant amount of wealth and resources at their disposal.

House Money Effect

The tendency for individuals to take greater risks when investing or gambling with money that was won or received unexpectedly, as opposed to their own hard-earned money.

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