Question

What is a contingent deferred sales load (CDSC) in the context of a mutual fund withdrawal?

A) A tax imposed on the withdrawn amount
B) An upfront fee charged at the time of investment
C) A charge shareholders pay when withdrawing from a mutual fund
D) A bonus given to long-term investors

Answer 1

A contingent deferred sales load (CDSC) is a charge that shareholders pay when withdrawing from a mutual fund.

Step-by-step explanation:

A contingent deferred sales load (CDSC) in the context of a mutual fund withdrawal is Option C: A charge shareholders pay when withdrawing from a mutual fund.

CDSC is a fee imposed on investors when they sell or redeem their shares in the mutual fund. The amount of the CDSC typically decreases over time and may eventually be reduced to zero if the investor holds the shares for a long enough period.