Question 1

Sixty-five percent of Sally's mutual funds are invested in environmentally friendly companies. We can assume Sally has invested in sector funds.

Accepted Answer

A) True 
 B)False  True

Question 2

What are the tax liabilities concerning investing in a mutual fund?

Accepted Answer

There may be a tax liability due on the current dividend and capital gains distributions made during the current tax year.Taxes on these distributions are due regardless if you received the distributions in cash or reinvested them in additional shares.In addition to taxes on distributions, there is also a potential capital gains tax on the increase in NAV from the purchase to the sale.One of the great benefits of investing in most large Mutual Fund Companies is they provide shareholders with an end of the year 1099 tax statement that shows all distributions and capital gains for the previous tax year.

Question 3

Money market mutual funds have check writing privileges.

Accepted Answer

A) True 
 B)False  True

Question 4

The most common and popular form of mutual fund is an open-end mutual fund.

Accepted Answer

A) True 
 B)False

Question 5

Compare the investment vehicles and tax treatment of tax-exempt and government securities money market mutual funds.

Accepted Answer

The tax-exempt fund invests only in very

Question 6

Of the different types of mutual funds, ________ are by far the most popular, and now account for half of all mutual funds.

Accepted Answer

A)  money market mutual funds 
B)  stock mutual funds 
C)  balanced mutual funds 
D)  asset allocation funds 
E)  bond funds 
A)  money market mutual funds 
B)  stock mutual funds 
C)  balanced mutual funds 
D)  asset allocation funds 
E)  bond funds

Question 7

Stock market mutual funds are not very popular and consumers tend to invest in them the least.

Accepted Answer

A) True 
 B)False

Question 8

The ________ is the value of the mutual fund's holdings, minus any debt, divided by the number of shares outstanding.

Accepted Answer

A)  net worth 
B)  market value 
C)  tangible value 
D)  net asset value 
E)  none of the above 
A)  net worth 
B)  market value 
C)  tangible value 
D)  net asset value 
E)  none of the above

Question 9

Mutual funds charge high sales loads because their potential returns are much higher than the returns for individual stocks.

Accepted Answer

A) True 
 B)False

Question 10

12b-1 fees are marketing expenses for the mutual fund that are passed on to the fund shareholders.

Accepted Answer

A) True 
 B)False

Question 11

What steps would you advise someone to go through when buying a mutual fund?

Accepted Answer

First, determine your investme

Question 12

An aggressive growth fund is an appropriate choice for an investor looking for capital gains.

Accepted Answer

A) True 
 B)False

Question 13

Explain what the three 'classes' of a mutual fund shares are all about.

Accepted Answer

There is actually only one mutual fund b

Question 14

You purchased 1,000 shares of fund ABC for $35.00 NAV per share. You elected the dividend reinvestment plan and had all dividend and capital gains distributions reinvested in additional shares. You just closed your account and sold 1,100 shares for $30 NAV. What was your total return on this investment?

Accepted Answer

A)  -6.06% 
B)  -5.71% 
C)  5.71% 
D)  6.06% 
A)  -6.06% 
B)  -5.71% 
C)  5.71% 
D)  6.06%

Question 15

Investment companies are required by law to offer a prospectus to prospective investors. Let your instructor know which 5 parts you think are the most important and why.

Accepted Answer

The fund's goal and investment strategy

Question 16

What are the differences between an ETF and a mutual fund?

Accepted Answer

A)  An ETF can be traded like a share of common stock. 
B)  An ETF can be purchased on margin or sold short like a share of common stock. 
C)  An ETF is more tax-efficient than most mutual funds. 
D)  All of the above are correct. 
E)  Only A and C are correct 
A)  An ETF can be traded like a share of common stock. 
B)  An ETF can be purchased on margin or sold short like a share of common stock. 
C)  An ETF is more tax-efficient than most mutual funds. 
D)  All of the above are correct. 
E)  Only A and C are correct

Question 17

When comparing which mutual fund to invest in, which of the following would be important to consider?

Accepted Answer

A)  Load 
B)  Net asset value 
C)  Expense ratio 
D)  All of the above are correct 
E)  Only A and C are correct 
A)  Load 
B)  Net asset value 
C)  Expense ratio 
D)  All of the above are correct 
E)  Only A and C are correct

Question 18

Once you open a mutual fund account, you can use EFT to have money directly withdrawn from your bank account to pay yourself first.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that the current value of all of a mutual fund's holdings is determined to be $750 million. The fund's liabilities are $125 million and it grew at 20% from last year. It currently has 45 million shares outstanding. What is the fund's NAV?

Accepted Answer

A)  $12.00 per share 
B)  $13.89 per share 
C)  $14.40 per share 
D)  $16.80 per share 
A)  $12.00 per share 
B)  $13.89 per share 
C)  $14.40 per share 
D)  $16.80 per share

Question 20

What is the purpose of a Target Retirement fund and who would benefit from it?

Accepted Answer

A target retirement fund is designed to

Sixty-five percent of Sally's mutual funds are invested in environmentally friendly companies. We can assume Sally has invested in sector funds.

What are the tax liabilities concerning investing in a mutual fund?

Money market mutual funds have check writing privileges.

The most common and popular form of mutual fund is an open-end mutual fund.

Compare the investment vehicles and tax treatment of tax-exempt and government securities money market mutual funds.

Of the different types of mutual funds, ________ are by far the most popular, and now account for half of all mutual funds.

Stock market mutual funds are not very popular and consumers tend to invest in them the least.

The ________ is the value of the mutual fund's holdings, minus any debt, divided by the number of shares outstanding.

Mutual funds charge high sales loads because their potential returns are much higher than the returns for individual stocks.

12b-1 fees are marketing expenses for the mutual fund that are passed on to the fund shareholders.

What steps would you advise someone to go through when buying a mutual fund?

An aggressive growth fund is an appropriate choice for an investor looking for capital gains.

Explain what the three 'classes' of a mutual fund shares are all about.

Investment companies are required by law to offer a prospectus to prospective investors. Let your instructor know which 5 parts you think are the most important and why.

What are the differences between an ETF and a mutual fund?

When comparing which mutual fund to invest in, which of the following would be important to consider?

Once you open a mutual fund account, you can use EFT to have money directly withdrawn from your bank account to pay yourself first.

Suppose that the current value of all of a mutual fund's holdings is determined to be $750 million. The fund's liabilities are $125 million and it grew at 20% from last year. It currently has 45 million shares outstanding. What is the fund's NAV?

What is the purpose of a Target Retirement fund and who would benefit from it?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 15: Mutual Funds: An Easy Way to Diversify

Sixty-five percent of Sally's mutual funds are invested in environmentally friendly companies. We can assume Sally has invested in sector funds.

What are the tax liabilities concerning investing in a mutual fund?

Money market mutual funds have check writing privileges.

The most common and popular form of mutual fund is an open-end mutual fund.

Compare the investment vehicles and tax treatment of tax-exempt and government securities money market mutual funds.

Of the different types of mutual funds, ________ are by far the most popular, and now account for half of all mutual funds.

Stock market mutual funds are not very popular and consumers tend to invest in them the least.

The ________ is the value of the mutual fund's holdings, minus any debt, divided by the number of shares outstanding.

Mutual funds charge high sales loads because their potential returns are much higher than the returns for individual stocks.

12b-1 fees are marketing expenses for the mutual fund that are passed on to the fund shareholders.

What steps would you advise someone to go through when buying a mutual fund?

An aggressive growth fund is an appropriate choice for an investor looking for capital gains.

Explain what the three 'classes' of a mutual fund shares are all about.

Investment companies are required by law to offer a prospectus to prospective investors. Let your instructor know which 5 parts you think are the most important and why.

What are the differences between an ETF and a mutual fund?

When comparing which mutual fund to invest in, which of the following would be important to consider?

Once you open a mutual fund account, you can use EFT to have money directly withdrawn from your bank account to pay yourself first.

Suppose that the current value of all of a mutual fund's holdings is determined to be $750 million. The fund's liabilities are $125 million and it grew at 20% from last year. It currently has 45 million shares outstanding. What is the fund's NAV?

What is the purpose of a Target Retirement fund and who would benefit from it?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters