OVERVIEW FINANCIAL INDUSTRY PART 2

Question 1

Fund Facts Section / Cost of Buying

List the 3 subsections of cost of buying?

Answer 1

• Sales charges
• Fund expenses
• Other fees

Question 2

Fund Expenses

Answer 2

• investor does not pay for these expenses directly
• fund expenses reduce fund’s returns
• Expenses may include Management Expense Ratio (MER) and the Trading Expense Ratio (TER)

Question 3

Trading Expense Ratio

Answer 3

Represents the amount of trading commissions incurred to manage the portfolio compared to the total assets of the fund

Question 4

Fund / Other Fees

Answer 4

Other fees - these may include short-term trading fees, switch fees and/or change fees.

Question 5

Under National Instrument 81-101 most mutual funds can use the Simplified Prospectus System. The documents required under this system include:

Answer 5

• Simplified Prospectus
• Financial Statements
• Annual Information Form (AIF)

Question 6

Simplified Prospectus

Answer 6

• Must be given to the purchaser if requested
• Has two sections
• Part A: provides introductory information about the mutual fund, general information about the mutual fund
• Information about mutual funds managed by the mutual fund organization
• Part B: Specific information about the mutual fund

Question 7

Annual Information Form (AIF)

Answer 7

*