Chartered Investment Manager (CIM) Practice Exam · Question
A Canadian investment firm charges clients a management expense ratio (MER) for mutual funds and an assets under management (AUM) fee for separately managed accounts. This is an example of:
Both the MER (for mutual funds) and the AUM (for SMA) are common components of 'bundled' fee structures, where the fee typically covers management, administrati
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Question: A Canadian investment firm charges clients a management expense ratio (MER) for mutual funds and an assets under management (AUM) fee for separately managed accounts. This is an example of:
Answer options:
- A commission-based fee structure.
- A performance-based fee structure. ✅ A bundled fee structure.
- A transparent fee disclosure which is standard practice.
Correct answer: A bundled fee structure.
Explanation: Both the MER (for mutual funds) and the AUM (for SMA) are common components of 'bundled' fee structures, where the fee typically covers management, administration, and other services.
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Other Canadian certifications candidates often prepare for alongside this one.