Mutual Funds & ETFs Flashcards
1
Q
A ___ gives an investor 13 months to buy more mutual fund shares in order to qualify for a ___.
A
Letter of intent; breakpoint
2
Q
A mechanism for offering break points is rights of ___.
A
Accumulation
3
Q
Mutual funds are obligated to distribute ___ to their shareholders once a year, & these are taxable.
A
Long term capital gains
4
Q
ETFs are not obligated to pay ___ annually, so capital gains taxation occurs (usually) only when ___.
A
Dividends or gains; ETF shares are sold
5
Q
If a customer redeems a mutual fund share within 7 business days, any sales charge earned by the representative and member firm is ___.
A
Forfeited and paid back to the fund sponsor.
6
Q
To compute a new lowered offering price for mutual fund, the formula is …
A
Ask price=bid (NAV)/(100%-sales charge %)
