Practice Quiz

FINRA Series 7

Category - Series 7

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Which of the following statements about mutual fund fees is accurate?
  1. the management group receives a fee based upon the amount of assets in the fund
  2. the sponsor receives a management fee for buying and selling the fund’s portfolio securities
  3. the management group receives part of the sales charge in addition to a management fee
  4. the custodian receives part of the management fee in addition to a fee for safekeeping of the fund’s securities
Explanation
Answer: A - the management group receives a fee based upon the amount of assets in the fund. The management fee is based upon the fund’s assets. The sale charge in choice C is received by the fund sponsor (underwriter), which could include the management group but not necessarily.
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