Business and Personal Finance Dictionary

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• REDEMPTION FEE
  
  Some open-end mutual funds impose a redemption fee when you sell shares in the fund, often during a specific (and sometimes brief) period of time after you purchase those shares. The fee is usually a percentage of the value of the shares you sell, but it may also be a flat fee, or fixed amount. The purpose of the fee is to prevent large-scale withdrawals from the fund in response to changes in the financial markets, which might require the fund manager to sell holdings at a loss in order to meet the fund's obligation to buy back your shares.
  
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