A customer is considering the purchase of $80,000 of ABC Income Fund and intends to use the money 3 years from now to purchase a new boat. The fund offers the following share classes:
Class A shares:
5% initial sales charge
No 12b-1 fees
Breakpoint Schedule:
$0 - $10,000 5% sales charge
$10,001 - $30,000 3% sales charge
$30,001 - $50,000 2% sales charge
$50,001 - $100,000 1% sales charge
Class B shares:
No initial sales charge
.40% annual 12b-1 fee
CDSC if the customer redeems within the following time periods:
Redeem within Year 1: 5% redemption fee
Redeem within Year 2: 4% redemption fee
Redeem within Year 3: 3% redemption fee
Redeem within Year 4: 2% redemption fee
Redeem within Year 5: 1% redemption fee
Redeem after Year 5: 0% redemption fee
Class C shares:
No initial sales charge
.75% annual 12b-1 fee
No CDSC
The best recommendation for this customer is:
A. purchase Class A shares
B. purchase Class B shares
C. purchase Class C shares
D. divide the purchase equally into $40,000 each for Class B and Class C shares