What costs are incurred by an investor when purchasing a mutual fund?

What will be an ideal response?

As noted in the previous problem, a mutual fund may have a multi-class structure that gives the investor an option to select a fee and expense structure that the investor prefers. For example, a multi-class structure could have Class A shares, Class B shares, and Class C shares. Relative to other mutual fund classes in the structure, Class A shares have a front-end sales load but a lower 12B-1 fee and lower annual expenses. No front-end sales load is typically charged for Class B shares, but there is a contingent deferred sales load as well as a 12b-1 fee and other annual expenses. Class C shares have a 12b-1 fee and other annual expenses. The sales load is either a front-end or back-end sales load but it is lower than the Class A and Class B shares. As explained in the previous problem, each investor has to examine the fee choices along with their investment horizon to determine which class would have cheaper expenses given their time frame.