What defines a sales breakpoint of a mutual fund?

A sales breakpoint of a mutual fund is defined by the minimum dollar amount of a purchase at which an investor qualifies for a volume discount. When an investor purchases shares in a mutual fund and their investment reaches or exceeds this specific threshold, they benefit from a reduced sales charge or transaction fee. This structure encourages larger investments by incentivizing investors to put in more significant amounts, making it more attractive for them to invest in the mutual fund.

The other options present different scenarios not related to how breakpoints function. The minimum share amount may suggest a different aspect of fund shares but does not accurately capture the essence of volume discounts tied specifically to dollar amounts. Similarly, the references to letters of intent relate to investor commitments and timing rather than the price thresholds defined by breakpoints.