Question 1

Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund.

Accepted Answer

There is a stock mutual fund for almost

Question 2

An ________ is a fixed pool of securities, generally municipal bonds.

Accepted Answer

A)  earning trust 
B)  unit investment trust 
C)  equity corporation 
D)  asset diversification company 
E)  none of the above 
A)  earning trust 
B)  unit investment trust 
C)  equity corporation 
D)  asset diversification company 
E)  none of the above

Question 3

You purchased 100 shares of Gibraltar Strength Fund for $12.75 per share. Its current NAV is 18.75 per share. There was a total of $0.25 in dividends and $0.75 in capital gains distributed. What is your total return?

Accepted Answer

A)  32.00% 
B)  37.33% 
C)  47.06% 
D)  54.90% 
A)  32.00% 
B)  37.33% 
C)  47.06% 
D)  54.90%

Question 4

Roberta Cartwright puts money each month into a mutual fund that has very few controls; in that, the managers can invest in whatever they want because this type of fund is not regulated by the SEC. Roberta has a(n) ________ fund.

Accepted Answer

A)  open-end 
B)  closed-end 
C)  hedge 
D)  no-load 
E)  back-end load 
A)  open-end 
B)  closed-end 
C)  hedge 
D)  no-load 
E)  back-end load

Question 5

One type of mutual fund does not endeavor to achieve the goals of a balance of bonds and stock or growth, income, and stability. Instead, it focuses on personal characteristics, such as age and risk tolerance, and your position in the financial life cycle. This is the ________.

Accepted Answer

A)  index fund 
B)  sector fund 
C)  growth and income fund 
D)  balanced fund 
E)  life cycle fund 
A)  index fund 
B)  sector fund 
C)  growth and income fund 
D)  balanced fund 
E)  life cycle fund

Question 6

A mutual fund ________ provides a description of the mutual fund including the fund's objectives and risk, its historical performance, its expenses, manager's history and other information.

Accepted Answer

A)  prospectus 
B)  prospector 
C)  debenture 
D)  indenture 
A)  prospectus 
B)  prospector 
C)  debenture 
D)  indenture

Question 7

Why is it important to determine what investment goals you are trying to achieve before you invest in a mutual fund?

Accepted Answer

A)  The mutual fund company may attempt to change your goals to meet their fund offerings. 
B)  You must provide the mutual fund company with your defined goals before they allow you to purchase shares. 
C)  You must look for a mutual fund with the same or similar investment goals that you have in order to find an appropriate fund. 
D)  All of the above are correct 
E)  Only A and B are correct. 
A)  The mutual fund company may attempt to change your goals to meet their fund offerings. 
B)  You must provide the mutual fund company with your defined goals before they allow you to purchase shares. 
C)  You must look for a mutual fund with the same or similar investment goals that you have in order to find an appropriate fund. 
D)  All of the above are correct 
E)  Only A and B are correct.

Question 8

What does the following mathematical expression yield?
(total market value of all securities ‑liabilities) divided by (total shares outstanding) = ________.

Accepted Answer

A)  asset value 
B)  net value 
C)  net asset value 
D)  net return value 
E)  asset return value 
A)  asset value 
B)  net value 
C)  net asset value 
D)  net return value 
E)  asset return value

Question 9

Which type of risk can an investor effectively manage by investing in broadly diversified mutual funds?

Accepted Answer

A)  Serial risk 
B)  Systematic risk 
C)  Unsystematic risk 
D)  None of the above is correct. 
A)  Serial risk 
B)  Systematic risk 
C)  Unsystematic risk 
D)  None of the above is correct.

Question 10

Do the advantages of investing in a Mutual Fund outweigh the disadvantages for the average small investor?

Accepted Answer

A case can be made that the advantages t

Question 11

A mutual fund that does not charge a commission to own its shares is called a ________.

Accepted Answer

A)  free issue fund 
B)  market fund 
C)  no-load fund 
D)  no-charge fund 
E)  free-load fund 
A)  free issue fund 
B)  market fund 
C)  no-load fund 
D)  no-charge fund 
E)  free-load fund

Question 12

Why would someone want to give serious attention to investing in mutual funds? At the same time, why would you not invest in them?

Accepted Answer

Mutual funds on the whole serve to level

Question 13

The trade-off for mutual fund diversification is lower-than-market performance.

Accepted Answer

A) True 
 B)False

Question 14

There are dissimilarities between U.S. government, GNMA, municipal, and corporate bond funds. Please point them out.

Accepted Answer

The major difference stems from the bond

Question 15

Total returns on mutual funds can be calculated by adding dividends distributed, capital gains distributed, and ________ and dividing this sum by the beginning NAV.

Accepted Answer

A)  beginning NAV ‑ending NAV 
B)  ending NAV ‑beginning NAV 
C)  dividends undistributed + capital gains undistributed 
D)  beginning NAV + ending NAV 
E)  ending NAV + beginning NAV 
A)  beginning NAV ‑ending NAV 
B)  ending NAV ‑beginning NAV 
C)  dividends undistributed + capital gains undistributed 
D)  beginning NAV + ending NAV 
E)  ending NAV + beginning NAV

Question 16

A closed-end fund trades more like common stock than a mutual fund.

Accepted Answer

A) True 
 B)False

Question 17

Mutual funds eliminate the systematic risk through diversification.

Accepted Answer

A) True 
 B)False

Question 18

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Accepted Answer

A) True 
 B)False

Question 19

A sector fund is a mutual fund that tries to maximize the degree of diversification.

Accepted Answer

A) True 
 B)False

Question 20

Briefly describe the cost involved in mutual funds.

Accepted Answer

A mutual fund has either a sales commiss

Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund.

An ________ is a fixed pool of securities, generally municipal bonds.

You purchased 100 shares of Gibraltar Strength Fund for $12.75 per share. Its current NAV is 18.75 per share. There was a total of $0.25 in dividends and $0.75 in capital gains distributed. What is your total return?

Roberta Cartwright puts money each month into a mutual fund that has very few controls; in that, the managers can invest in whatever they want because this type of fund is not regulated by the SEC. Roberta has a(n) ________ fund.

One type of mutual fund does not endeavor to achieve the goals of a balance of bonds and stock or growth, income, and stability. Instead, it focuses on personal characteristics, such as age and risk tolerance, and your position in the financial life cycle. This is the ________.

A mutual fund ________ provides a description of the mutual fund including the fund's objectives and risk, its historical performance, its expenses, manager's history and other information.

Why is it important to determine what investment goals you are trying to achieve before you invest in a mutual fund?

What does the following mathematical expression yield? (total market value of all securities ‑liabilities) divided by (total shares outstanding) = ________.

Which type of risk can an investor effectively manage by investing in broadly diversified mutual funds?

Do the advantages of investing in a Mutual Fund outweigh the disadvantages for the average small investor?

A mutual fund that does not charge a commission to own its shares is called a ________.

Why would someone want to give serious attention to investing in mutual funds? At the same time, why would you not invest in them?

The trade-off for mutual fund diversification is lower-than-market performance.

There are dissimilarities between U.S. government, GNMA, municipal, and corporate bond funds. Please point them out.

Total returns on mutual funds can be calculated by adding dividends distributed, capital gains distributed, and ________ and dividing this sum by the beginning NAV.

A closed-end fund trades more like common stock than a mutual fund.

Mutual funds eliminate the systematic risk through diversification.

An ETF provides similar services to an investor to those that a mutual fund investment provides.

A sector fund is a mutual fund that tries to maximize the degree of diversification.

Briefly describe the cost involved in mutual funds.

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

Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund.

An ________ is a fixed pool of securities, generally municipal bonds.

You purchased 100 shares of Gibraltar Strength Fund for $12.75 per share. Its current NAV is 18.75 per share. There was a total of $0.25 in dividends and $0.75 in capital gains distributed. What is your total return?

Roberta Cartwright puts money each month into a mutual fund that has very few controls; in that, the managers can invest in whatever they want because this type of fund is not regulated by the SEC. Roberta has a(n) ________ fund.

One type of mutual fund does not endeavor to achieve the goals of a balance of bonds and stock or growth, income, and stability. Instead, it focuses on personal characteristics, such as age and risk tolerance, and your position in the financial life cycle. This is the ________.

A mutual fund ________ provides a description of the mutual fund including the fund's objectives and risk, its historical performance, its expenses, manager's history and other information.

Why is it important to determine what investment goals you are trying to achieve before you invest in a mutual fund?

What does the following mathematical expression yield? (total market value of all securities ‑liabilities) divided by (total shares outstanding) = ________.

Which type of risk can an investor effectively manage by investing in broadly diversified mutual funds?

Do the advantages of investing in a Mutual Fund outweigh the disadvantages for the average small investor?

A mutual fund that does not charge a commission to own its shares is called a ________.

Why would someone want to give serious attention to investing in mutual funds? At the same time, why would you not invest in them?

The trade-off for mutual fund diversification is lower-than-market performance.

There are dissimilarities between U.S. government, GNMA, municipal, and corporate bond funds. Please point them out.

Total returns on mutual funds can be calculated by adding dividends distributed, capital gains distributed, and ________ and dividing this sum by the beginning NAV.

A closed-end fund trades more like common stock than a mutual fund.

Mutual funds eliminate the systematic risk through diversification.

An ETF provides similar services to an investor to those that a mutual fund investment provides.

A sector fund is a mutual fund that tries to maximize the degree of diversification.

Briefly describe the cost involved in mutual funds.

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