A 1 to 5 percent fee that investors pay when they withdraw their investment from a mutual fund is called a:

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The 1 to 5 percent fee that investors pay when they withdraw their investment from a mutual fund is called a contingent deferred sales load (CDSC). This fee is designed to discourage investors from frequently buying and selling shares in the fund. Choice A is incorrect because there is no specific fee called a withdrawal fee in mutual funds. Choice B is incorrect because the 12b-1 fee is an ongoing fee paid by investors for marketing and distribution expenses. Choice D is incorrect because a front-end load is a fee paid by investors when they initially purchase shares in the fund. Choice E is incorrect because a management fee is a fee paid by investors to compensate fund managers for managing the fund.

A 1 to 5 Percent Fee That Investors Pay When