Question

redeeming your back-end load mutual fund shares might result in a charge called the: group of answer choices usage fee. recordkeeping fee. 12b-1 fee. redemption fee.

Answer 1

A redemption fee is a charge you might incur when redeeming back-end load mutual fund shares, and it is assessed as an exit fee to discourage short-term trading.

Step-by-step explanation:

When redeeming your back-end load mutual fund shares, the charge you might incur is called a redemption fee. This fee is assessed by some mutual funds when shareholders redeem, or sell back, their shares to the fund. The redemption fee is usually a percentage of the total amount being redeemed and serves as a sort of exit fee designed to discourage short-term trading. It's important to be aware of this fee, as it can decrease the profit from your investment. In contrast, other fees such as usage fees, recordkeeping fees, and 12b-1 fees exist within the structure of mutual funds for different purposes, such as marketing and operational expenses.