10. Investment Mgmt: Income Genera

Question 0

Load

Answer 0

Fee for salesman
Fund levies sales charge on investor for executing transaction
Class A: front end load: investor pays NAV + load

Question 1

3 tiered system Fed inc taxation for municipal bond interest payments Result of TRA 1986

Answer 1

Interest on Muni bonds Exempt from all fed inc tx
system

1 int on public purpose muni remains free from all fed inc taxation
2 int on tx exempt private activity muni (qual bonds or AMT is exempt from reg fed inc taxation but

Question 2

No Load

Answer 2

Buy directly from mutual fund company. no sales rep

No sales charges, no commissions

Question 3

Fees

Answer 3

2 categories

1. On going yearly fees To keep invested in fund. -> Expense Ratio
2. TransactionFee - paid when you buy/sell shares in fund (Load)

Question 4

Expense Ratio

Answer 4

On going expense of a mutual fund

1. Mgmt fee = cost of hiring Fund Mgr
2. Admin Costs - necessities incl record keeping , customer service
3. 12B -1 Fee =!for distribution and servicing costs. Pays for brokerage commissions, Advertising Promoting the Dunf