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You currently have $115,000 invested in your self-directed IRA. All $115,000 is invested in class A...


You currently have $115,000 invested in your self-directed IRA. All $115,000 is invested in class A shares of mutual funds that are part of the American Funds family. You are going to call your broker next week and invest an additional $4,000 into class A shares of the SMALLCAP World Fund. The ticker symbol for class A shares of this mutual fund is SMCWX.

A. What is the percentage sales charge that you will be charged?

B. Are Class A shares of SMCWX that are acquired through reinvestment of dividends or capital gain distributions subject to an initial sales charge?

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Answer #1

Ans A. 5.75% sales charge will be incurred.

Ans B. Class A shares of SMCWX that are acquired through reinvestment of dividends and capital gain distributions are NOT subject to an initial sales charge.

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