Q:
An individual has started investments of $100/month into a spread-load, periodic payment plan. What is the maximum sales charge that may be taken by the company over the first 48 months?
a) $432
b) $768
c) $960
d) $2,400
A:
The correct answer is b.
When a periodic payment (or contractural) plan company is organized as a spread-load company, it may take sales charges of 20% on any deposit, but may not exceed an average of 16% over the first 4 years. 48 deposits × $100 = $4,800 × 16% = $768.

MORE FAQS

  1. An investor opened a ten-year, $100/month front-end load periodic payment plan 14 months ago which she ...

  2. Harry began a front-end load contractual plan, calling for $100 a month for 10 years ...

  3. A “normal market” is also called a (an): A) Inverted market b) Carrying charge market c) Premium market ...

  4. A Straddle

  5. A formula timing plan which consists of periodic purchases of a fixed dollar amount of an investment company regardless of price is known as:

  6. The Shur-Gro variable annuity uses an AIR of 3% for those contract holders who are in the annuity stage

  7. What is the difference between transfer price and standard cost?

  8. All of the following statements are true with respect to the various ways that equity investments may ...

  9. An investor with 1,000 shares of the Amazing Growth fund places a redemption order for the shares before ...

  10. Which of the following accounts does ERISA cover?

  11. When diversifying a bond portfolio, you should make sure to take into account all of the following EXCEPT:

  12. Which is not a process the Federal Reserve uses to control the level of business activity?

  13. John purchased 100 shares of XYZ stock for $50 per share. He held the stock for one year then sold the ...

  14. There are several major factors that make mutual funds attractive investments for many people ...

  15. A brokerage customer has $10,000 in securities and a credit balance of $4,000 ...

  16. Are dividends the best way to make money for retirement?

  17. How many attempts at each CFA exam is a candidate permitted?

  18. What's the average salary of a financial advisor?

  19. Why is Hong Kong considered a tax haven?

  20. Is smart beta cheaper than hedge funds?

RELATED FAQS

  1. An investor opened a ten-year, $100/month front-end load periodic payment plan 14 ...

    The correct answer is d) For the first 18 months of a front-end load contractural plan, the investor will be refunded the ...
  2. Harry began a front-end load contractual plan, calling for $100 a month for 10 years ...

    The correct answer is A) In a front-end load contractual plan, the investor will receive the NAV plus all sales charges greater ...
  3. A “normal market” is also called a (an): A) Inverted market b) Carrying charge market ...

    Free info on financial certification exams including study guides, exam questions, and much more!
  4. A Straddle

    A. Speculates on the rate of change of a security's market price. B. Speculates on the rate of change of an option's market ...
  5. A formula timing plan which consists of periodic purchases of a fixed dollar amount ...

    a. Dollar cost averaging b. Share averagingc. Constant dollar pland. Constant ratio plan Answer: A"A" is correct because ...
  6. The Shur-Gro variable annuity uses an AIR of 3% for those contract holders who are ...

    The correct answer is b. Any time the actual growth rate of the separate account exceeds the account’s AIR, the payment will ...
RELATED TERMS
  1. Spread-Load Contractual Plan

    A fee-payment structure applicable to mutual funds in which the ...
  2. Periodic Payment Plan

    A type of investment plan, often sold to military personnel, ...
  3. Organic Growth

    The growth rate that a company can achieve by increasing output ...
  4. Total Finance Charge

    The amount of money a consumer pays for borrowing money on a ...
  5. Sales Charge

    A commission paid by an investor on his or her investment in ...
  6. Fixed Charge

    Any type of fixed expense that recurs on a regular basis. Fixed ...
Hot Definitions
  1. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  3. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center