Products & Their RisksQuestion 119 of 398
Rights of accumulation allow a mutual fund investor to:
a.Redeem shares free of any tax
b.Count the current value of existing holdings toward reaching a breakpoint on new purchases
c.Receive dividends in cash without reinvestment
d.Buy Class B shares at the Class A price
Explanation
Rights of accumulation let an investor qualify for a breakpoint (reduced sales charge) by adding the current value of shares already owned to a new purchase. Unlike a Letter of Intent, there is no time limit and no obligation to invest a set future amount; the benefit accrues as holdings grow.
Law Reference: Investment Company Act of 1940Practice all 398 questions free — no signup required.
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