SIE Exam Practice Question 1005

Correct Answer: D

Explanation:

If a mutual fund charges a front-end sales load of 5% for purchases of less than $50,000, and 4% for purchases between $50,000 and $99,999, the level at which the discount becomes available is known as the breakpoint. A right of accumulation (ROA) typically provides a discount to current mutual fund purchases by combining both current and previous fund transactions to reach a breakpoint. A letter of intent (LOI) is a statement provided by an investor that expresses the intent to invest an amount over the breakpoint within a given period of time specified by the fund. In the case of ROAs and LOIs, investors are generally permitted to credit mutual fund transactions in different mutual fund classes toward breakpoint discounts.