Question

Match each cost with the investment type to which it relates.

1. Commissions
2. Investment advisory fees
3. Administrative costs
4. Hourly fees
a) Stocks and Bonds

b) Mutual Funds

c) Real Estate

d) Precious Metals

Answer 1

Commissions are associated with stocks and bonds, investment advisory fees and administrative costs typically relate to mutual funds. Hourly fees can apply to financial advisory services across different investment types.

Step-by-step explanation:

Costs Related to Different Investment Types

To match each cost with the correct investment type, we consider the usual fees associated with the handling and management of different investment vehicles:

1. Commissions: Typically associated with buying and selling stocks and bonds (a). Brokers earn commissions on transactions.
2. Investment advisory fees: Usually linked to managed accounts like mutual funds (b) where professional advisors manage the fund.
3. Administrative costs: These can be related to a variety of investment types, but for this context, it typically refers to mutual funds (b) where administrative fees for fund management are incurred.
4. Hourly fees: These are often charged by financial advisors or consultants who provide personalized investment advice, and could relate to various investment types, but not specific enough to match directly to the types listed here.

Each investment type - stocks and bonds, mutual funds, real estate, and precious metals - have unique costs and fee structures which investors need to consider when making investment decisions.