Products & RisksQuestion 21 of 125
A breakpoint in a front-end load mutual fund refers to:
a.A reduced sales charge available for larger investment amounts
b.A point at which the fund stops accepting new investors
c.The date the fund pays its annual dividend
d.The maximum loss the fund can experience
Explanation
Breakpoints are investment thresholds at which the sales charge percentage decreases; larger purchases qualify for lower loads. A letter of intent or rights of accumulation may let an investor reach a breakpoint over time. Recommending purchases just below a breakpoint to earn a higher commission is a prohibited practice.
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Related questions on this topic
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