Mutual Funds
Which of the following is included in a mutual fund expense ratio?
The expense ratio includes ongoing fees: management fees, 12b-1 fees, and administrative expenses. Sales loads (front and back-end) and trading costs are not included in the expense ratio.
Complete Analysis & Legal Rationale
The expense ratio includes ongoing fees: management fees, 12b-1 fees, and administrative expenses. Sales loads (front and back-end) and trading costs are not included in the expense ratio.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Regulatory framework for investment companies including mutual funds (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.