What is the maximum permissible 12b-1 fee for a mutual fund?

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Multiple Choice

What is the maximum permissible 12b-1 fee for a mutual fund?

Explanation:
12b-1 fees are annual charges that a mutual fund may levy to pay for distribution and shareholder services. These fees come out of the fund’s assets and reduce a shareholder’s returns, and they must be disclosed in the prospectus. The regulatory cap for these fees is 0.75% of the fund’s average net assets per year, so that amount represents the maximum a fund may charge for 12b-1 activities. In practice, some funds charge less (or none) depending on their distribution needs, but they cannot exceed the 0.75% limit.

12b-1 fees are annual charges that a mutual fund may levy to pay for distribution and shareholder services. These fees come out of the fund’s assets and reduce a shareholder’s returns, and they must be disclosed in the prospectus. The regulatory cap for these fees is 0.75% of the fund’s average net assets per year, so that amount represents the maximum a fund may charge for 12b-1 activities. In practice, some funds charge less (or none) depending on their distribution needs, but they cannot exceed the 0.75% limit.

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