IFSE Institute CIFC Exam - Topic 7 Question 16 Discussion

Actual exam question for IFSE Institute's CIFC exam

Question #: 16
Topic #: 7

[All CIFC Questions]

Which of the following statements regarding mutual fund fees is correct?

ARedemptions are made from units held by investors to pay trailer fees.

BTrailer fees are only paid to mutual fund dealers when a purchase is made.

CThe mutual fund dealer receives trailer fees based on the value of assets under management.

DTrading commissions are paid from the management fee.

Show Suggested Answer

Suggested Answer: C

by Franklyn at Apr 01, 2026, 01:51 PM

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11 days ago

I thought trailer fees were only paid at purchase?

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16 days ago

C is correct! Dealers get trailer fees based on assets.

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1 month ago

I’m confused about the management fee and trading commissions. I thought they were separate, so I’m not sure about option D being correct.

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1 month ago

I recall a practice question about how trailer fees work, and I think they are indeed paid based on the value of the assets, which again points to C.

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2 months ago

I’m not entirely sure, but I feel like redemptions don’t directly pay trailer fees. I might be mixing it up with something else we studied.

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2 months ago

I think I remember that trailer fees are ongoing, so they might be based on the assets under management, which makes me lean towards option C.

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