Question

Mutual funds charge ____:

a. only a performance fee
b. only a management fee
c. both management fees and performance fees
d. only small investors

Answer 1

Answer: Option C

Explanation: The mutual funds generally charge both management fees and performance fees from the investors.

The management fees is determined upon the level of investment initially and generally remains fixed over the lifetime of the fund. Whereas, the performance fees is variable in nature. The performance fees is determined as a percentage of profit made by the fund in a particular year.

Thus, from the above we can conclude that the right answer is option C.