SIE Exam Question 153: Answer and Explanation

Question: 153

Which of the following would be considered a breakpoint sale?

• A. A customer purchasing $150,000 in multiple mutual funds and paying the full sales charge of each.
• B. A customer receiving a 20 percent discount on an equity trade.
• C. A customer purchasing a municipal bond above par.
• D. A customer purchasing a corporate bond below par.

Correct Answer: A

Explanation:

A breakpoint sale takes place when an investor invests in investment company shares at a level below where the sales charge would be reduced (the breakpoint). Equities, municipal bonds, and corporate bonds are not investment company shares.