SIE Exam Question 549: Answer and Explanation

Question: 549

Which of the following can an investor sign which allows him or her to receive breakpoint discounts based upon a commitment to buy a specified number of mutual fund shares over a period of time, usually 13 months?

• A. Investment advisory contract
• B. Investment memorandum
• C. Letter of intent
• D. Prospectus

Correct Answer: C

Explanation:

An investor can sign a letter of intent (LOI) which allows him or her to receive breakpoint discounts based upon a commitment to buy a specified number of mutual fund shares over a period of time, usually 13 months.