SIE (Securities Industry Essentials) Practice Exam 2026 - Free SIE Practice Questions and Study Guide

Question: 1 / 400

Under what condition can a mutual fund be considered no-load?

If it operates without a board of directors

If it does not carry a sales charge and does not charge more than 25 basis points in annual 12b-1 fees

Explanation A mutual fund can be considered no-load if it does not charge a sales charge and keeps its annual 12b-1 fees below 25 basis points (0.25%). Option A is incorrect because the board of directors has no direct impact on the fees and charges associated with the fund. Option C is incorrect because the types of securities a fund invests in do not determine whether it is no-load or not. Option D is incorrect as well because offering dividends and capital gains is not indicative of the fees and charges associated with the fund. Only option B satisfies the requirements for a mutual fund to be considered no-load.

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If it invests exclusively in government securities

If it offers dividends and capital gains annually

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