Mutual Fund Distribution

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Question

Mutual funds are distributed by -

Answers

A. three major methods: through brokers, through dedicated sales forces, or through direct purchase from the fund or direct marketing. Most no-load funds have been distributed through brokers, while most load funds have been distributed through direct marketing.

B. two major methods: through a sales forces, or through direct purchase from the fund or direct marketing. Although most funds are currently distributed through direct marketing, there has recently been a trend toward distribution through a sales force.

C. three major methods: through brokers, through dedicated sales forces, or through direct purchase from the fund or direct marketing. Most no-load funds have been distributed through a sales force, while most load funds have been distributed through brokers.

D. two major methods: through a sales forces, or through direct purchase from the fund or direct marketing. Although most funds are currently distributed through a sales force, there has recently been a trend toward distribution through direct marketing.

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Explanations

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A. B. C. D.

In the past, no-load funds were sold only through direct marketing because the lack of a sales fee made it difficult to compensate brokers or a dedicated sales force. More recently, some brokers have started distributing no-load funds. Currently, about 54% of funds are distributed through a sales force, while 34% are distributed through direct marketing.

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