Question 1

Mutual funds provide an inexpensive way for investors to diversify and gain access to professional management.

Accepted Answer

A) True 
 B)False  True

Question 2

For an investor with little time or desire to follow the markets,a life cycle fund would be an appropriate choice for their retirement savings.

Accepted Answer

A) True 
 B)False  True

Question 3

With target retirement funds the only decision you have to make is when you plan to retire.

Accepted Answer

A) True 
 B)False  True

Question 4

You may be charged a small transaction fee when you buy no load funds through a "mutual fund supermarket."

Accepted Answer

A) True 
 B)False

Question 5

When screening mutual funds,two of the best websites are: Morningstar and Yahoo!Finance.

Accepted Answer

A) True 
 B)False

Question 6

Once you open a mutual fund account,you can use EFT to have money directly withdrawn from your bank account to pay yourself first.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 7

The No.1 predictor of mutual fund performance is "looking at the mutual fund's costs";the lower they are,the better the predicted performance.

Accepted Answer

A) True 
 B)False

Question 8

All distributions from a mutual fund,whether paid out or reinvested,are taxable in the year in which they occur.

Accepted Answer

A) True 
 B)False

Question 9

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 10

What are the advantages of index funds?

Accepted Answer

Index funds are set up to mimic or dupli

Question 11

Net asset value is determined by taking the total market value of all the securities held by the mutual fund,subtracting out any liabilities,and dividing the result by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 12

Bonnie and James are retired.They wish to continue to invest in their portfolio and are seeking income instead of growth.Which should they invest in?

Accepted Answer

A)  Growth funds 
B)  Bond funds 
C)  Sector funds 
D)  All of the above are correct. 
E)  Only A and C are correct. 
A)  Growth funds 
B)  Bond funds 
C)  Sector funds 
D)  All of the above are correct. 
E)  Only A and C are correct.

Question 13

An index fund is a great choice for those who want to "beat the market."

Accepted Answer

A) True 
 B)False

Question 14

An ETF provides better diversification than investing in individual company stocks.

Accepted Answer

A) True 
 B)False

Question 15

Explain how a dividend reinvestment plan is similar to compounding and the time value of money.

Accepted Answer

With compounding,the interest you earned

Question 16

Briefly describe the cost involved in mutual funds.

Accepted Answer

A mutual fund has either a sales commiss

Question 17

Briefly explain the three ways to make money when you own shares in a mutual fund.

Accepted Answer

First,as the value of all the securities

Question 18

For an investor with some speculative money to invest,which fund would be an appropriate choice for potentially large returns?

Accepted Answer

A)  Junk bond fund 
B)  Aggressive growth fund 
C)  High technology sector fund 
D)  All of the above are correct. 
E)  Only A and C are correct. 
A)  Junk bond fund 
B)  Aggressive growth fund 
C)  High technology sector fund 
D)  All of the above are correct. 
E)  Only A and C are correct.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Prepare a case for investing in a bond fund versus individual bonds.

Accepted Answer

A bond mutual fund suits the small inves

Mutual funds provide an inexpensive way for investors to diversify and gain access to professional management.

For an investor with little time or desire to follow the markets,a life cycle fund would be an appropriate choice for their retirement savings.

With target retirement funds the only decision you have to make is when you plan to retire.

You may be charged a small transaction fee when you buy no load funds through a "mutual fund supermarket."

When screening mutual funds,two of the best websites are: Morningstar and Yahoo!Finance.

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

The No.1 predictor of mutual fund performance is "looking at the mutual fund's costs";the lower they are,the better the predicted performance.

All distributions from a mutual fund,whether paid out or reinvested,are taxable in the year in which they occur.

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

What are the advantages of index funds?

Net asset value is determined by taking the total market value of all the securities held by the mutual fund,subtracting out any liabilities,and dividing the result by the number of shares outstanding.

Bonnie and James are retired.They wish to continue to invest in their portfolio and are seeking income instead of growth.Which should they invest in?

An index fund is a great choice for those who want to "beat the market."

An ETF provides better diversification than investing in individual company stocks.

Explain how a dividend reinvestment plan is similar to compounding and the time value of money.

Briefly describe the cost involved in mutual funds.

Briefly explain the three ways to make money when you own shares in a mutual fund.

For an investor with some speculative money to invest,which fund would be an appropriate choice for potentially large returns?

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

Prepare a case for investing in a bond fund versus individual bonds.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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 14: Mutual Funds: An Easy Way to Diversify

Mutual funds provide an inexpensive way for investors to diversify and gain access to professional management.

For an investor with little time or desire to follow the markets,a life cycle fund would be an appropriate choice for their retirement savings.

With target retirement funds the only decision you have to make is when you plan to retire.

You may be charged a small transaction fee when you buy no load funds through a "mutual fund supermarket."

When screening mutual funds,two of the best websites are: Morningstar and Yahoo!Finance.

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

The No.1 predictor of mutual fund performance is "looking at the mutual fund's costs";the lower they are,the better the predicted performance.

All distributions from a mutual fund,whether paid out or reinvested,are taxable in the year in which they occur.

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

What are the advantages of index funds?

Net asset value is determined by taking the total market value of all the securities held by the mutual fund,subtracting out any liabilities,and dividing the result by the number of shares outstanding.

Bonnie and James are retired.They wish to continue to invest in their portfolio and are seeking income instead of growth.Which should they invest in?

An index fund is a great choice for those who want to "beat the market."

An ETF provides better diversification than investing in individual company stocks.

Explain how a dividend reinvestment plan is similar to compounding and the time value of money.

Briefly describe the cost involved in mutual funds.

Briefly explain the three ways to make money when you own shares in a mutual fund.

For an investor with some speculative money to invest,which fund would be an appropriate choice for potentially large returns?

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

Prepare a case for investing in a bond fund versus individual bonds.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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