Finra Series-6 Exam - Topic 3 Question 106 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 106
Topic #: 3

Which of the following statements regarding a mutual fund's expenses are true?

AA mutual fund that has a front-end load cannot also charge 12b-1 fees.

BA mutual fund's record maintenance fees cannot exceed 0.25% of average net assets.

CThe expense ratio of a mutual fund cannot exceed 1.0%.

DA mutual fund family is prohibited from charging a fee when an investor exchanges his shares of one of its funds for another.

Show Suggested Answer

Suggested Answer: B

The true statement regarding a mutual fund's expenses is that a mutual fund's record maintenance fees cannot exceed 0.25% of average net assets. Mutual funds are permitted to have both front-end loads and charge 12b-1 fees, and the expense ratio of a mutual fund can exceed 1.0% (although a common recommendation is to select a fund with an expense ratio 1.0%.) Mutual fund families have the option of charging an ''exchange fee'' when an investor switches between their funds.

by Tawanna at Aug 17, 2025, 09:47 AM

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Blair

5 months ago

Not sure about that last one, I think they can charge fees for exchanges.

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Milly

5 months ago

Record maintenance fees are capped at 0.25%, that's a fact.

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Dorothea

5 months ago

Wait, are you serious? I thought there were limits on those fees!

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Beata

5 months ago

Totally agree, the expense ratio can definitely exceed 1%.

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Bette

6 months ago

A mutual fund can have both front-end loads and 12b-1 fees.

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Yong

6 months ago

I think mutual fund families can charge fees for exchanges, but I might be mixing that up with something else.

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Margarita

7 months ago

I feel like I saw a question about expense ratios in practice, but I can't recall if 1.0% is a hard limit or just a guideline.

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Deonna

7 months ago

I’m not sure about the record maintenance fees; I thought they could vary, but 0.25% sounds familiar.

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Jeff

7 months ago

I remember studying that front-end loads and 12b-1 fees can coexist, so I think A is false.

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Reena

7 months ago

The expense ratio limit is something I'm familiar with, but the other details about record maintenance fees and exchange fees are a bit fuzzy. I'll need to think through those carefully.

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Elise

7 months ago

Okay, I think I've got a good handle on this. I'll start by considering each statement individually and see which ones I can confidently identify as true or false.

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Maryln

8 months ago

Hmm, I'm not entirely sure about the rules around front-end loads and 12b-1 fees. I'll need to review that part carefully.

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Dortha

8 months ago

This question seems straightforward, but I want to make sure I understand the details about mutual fund expenses before selecting an answer.

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Rebbeca

8 months ago

D is the answer for sure. Mutual fund families love to charge those pesky 'exchange fees' whenever you move your money around. It's highway robbery if you ask me!

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