Products & Their RisksQuestion 67 of 398
Breakpoints on Class A shares reduce the sales charge based on the size of the investment. Which of the following would typically qualify a purchase for a breakpoint discount?
a.Combining unrelated clients' accounts to reach the threshold
b.A registered representative splitting one order into several small tickets
c.Buying just below the breakpoint amount to avoid paperwork
d.A single investor's purchase, together with holdings by their spouse and dependent children, reaching the threshold
Explanation
Breakpoint discounts apply based on the total investment made by a single account, including purchases combined across an individual, their spouse, and dependent children. Combining unrelated investors is not permitted, and deliberately selling just below a breakpoint (breakpoint selling) is a violation.
Law Reference: Investment Company Act of 1940Practice all 398 questions free — no signup required.
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