Question

Filet Minyon has decided she wants to invest in a mutual fund that has stocks with cattle. She plans to invest $100,000 over the next year. Today she meets you with only $10,000. The current load on her purchase is 5.5%. How can you help her. A. You can't help her but you could get her to utilize a group discount from her defined benefit plan and she will qualify for a discount B. She will qualify for a discount because $10,000 is enough to get her a discount C. She could combine her money with that of your firm and qualify for a discount D. She could sign a letter of intent and pay a load of 3.5% E. She could sign a letter of intent and pay a load of 5% ($100,000 - $10,000)

Answer 1

Option D is better,

A letter of intent is something which will allow the investors to receive discount on a commitment to buy a fixed number of mutual funds over a time period usually a year.

She can sign the letter if intent and she will fall in the category of 3.5 percent sales charge. She can however plan to pay the remaining amount in installments with advantage of break point qualifications