Series 65 Unit 14

To qualify as a REIT, it must distribute what % of taxable income to shareholders?

90%

What are 12b-1 fees?

Are from mutual funds, and are asset-based, generally charged quarterly, and come out of NAV (THEY ARE NOT SALES CHARGES)

Asset-based charges for Class A

Class A shares have a front-end load, but a low- or no asset-based sales charge.

Asset-based charges for B and C

Class B and C shares don't have a front-end load, but do have a higher asset-based sales charge.

What are relevant factors to use when comparing mutual funds

Tenure of fund manager / expense ratio / performance relative to a benchmark

A customer has been following several investment company quotes in the newspaper. She notices that the GEM Fund has an net asset value (NAV) of $12 and an ask price of $12.50, and that the ABC Fund has an NAV of $11.50 and an ask price of $10.98. The customer should conclude that

The price for open-end funds is determined by adding the sales charge to the NAV. An open-end fund can never have an ask (or offering) price less than its NAV, therefore ABC cannot be an open-end fund. GEM may be open or closed-end FUND, but ABC is closed-end

What is a disadvantage to investing in ETFs

They have commissions both when purchasing and liquidating shares

What is a purchaser acquiring with a UIT?

Units

Traits of a money market fund

has almost no price volatility, because the underlying portfolio consists of low-beta instruments, and the fund is deliberately managed for low beta

ETFs

have many similarities to closed-end investment companies. They are traded based on supply and demand rather than redeemed and are typically designed to track a particular index, such as the S&P 500. In most cases, ETFs have lower operating expense ratios than mutual funds with similar objectives.

What is a breakpoint

the dollar amount for the purchase of a load mutual fund's shares that qualifies the investor for a reduced sales charge. They have 13 months to contribute after signing letter of intent