Question 1

The term "open end" mutual fund means that this type of investment company can issue an unlimited number of ownership shares.

Accepted Answer

A) True 
 B)False

Question 2

A mutual fund that does not charge a commission on your ownership shares is referred to as a load fund.

Accepted Answer

A) True 
 B)False

Question 3

Shares in open-end mutual funds are actively traded in secondary markets.

Accepted Answer

A) True 
 B)False

Question 4

How is an asset allocation fund different from a balanced mutual fund?

Accepted Answer

Asset allocation funds seek to

Question 5

A(n)________ is a mutual fund company that has the ability to issue as many shares as investors are willing to purchase.

Accepted Answer

A)  closed-end mutual fund 
B)  share repurchase fund 
C)  open-end mutual fund 
D)  variable share mutual fund 
E)  none of the above 
A)  closed-end mutual fund 
B)  share repurchase fund 
C)  open-end mutual fund 
D)  variable share mutual fund 
E)  none of the above

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

When you own shares in a mutual fund,you directly own shares of the companies that make up the fund.

Accepted Answer

A) True 
 B)False

Question 8

Money market mutual funds invest primarily in the stocks of publicly traded companies.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following are passed on to fund share holders through 12b-1 fees?

Accepted Answer

A)  Commissions 
B)  Advertising expenses 
C)  Promotional fees 
D)  Only B and C 
E)  All of the above 
A)  Commissions 
B)  Advertising expenses 
C)  Promotional fees 
D)  Only B and C 
E)  All of the above

Question 10

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 11

Money market mutual funds

Accepted Answer

A)  are very risky investments. 
B)  require significant investments, so are out of reach of the common investor. 
C)  carry no loads. 
D)  None of the above. 
E)  Both A and B are correct. 
A)  are very risky investments. 
B)  require significant investments, so are out of reach of the common investor. 
C)  carry no loads. 
D)  None of the above. 
E)  Both A and B are correct.

Question 12

What are the four choices for purchasing a mutual fund?

Accepted Answer

1. broker
2. financi

Question 13

A unit investment trust usually invests in ________ and an REIT always invests in ________.

Accepted Answer

A)  real estate; agency bonds 
B)  real estate; municipal bonds 
C)  real estate; load mutual funds 
D)  municipal bonds; real estate 
E)  municipal bonds; real estate bonds 
A)  real estate; agency bonds 
B)  real estate; municipal bonds 
C)  real estate; load mutual funds 
D)  municipal bonds; real estate 
E)  municipal bonds; real estate bonds

Question 14

What is the total return for a mutual fund with the following characteristics? beginning NAV = $55.82
Ending NAV = $70.52
Dividends distributed = $2.25
Capital gains distributed = $3.50

Accepted Answer

A)  29.71% 
B)  30.82% 
C)  32.26% 
D)  36.64% 
A)  29.71% 
B)  30.82% 
C)  32.26% 
D)  36.64%

Question 15

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 16

Provide a list of sources of information to evaluate mutual funds.

Accepted Answer

1. Morningstar Mutual Funds
2.

Question 17

Which of the following is a benefit to investing in a mutual fund?

Accepted Answer

A)  Most small investors don't have the time, knowledge or desire to do the research necessary to purchase individual stocks. 
B)  Mutual fund transaction fees are considerably lower than the brokerage fees most small investors incur buying and selling individual stocks. 
C)  Most small investors want to be able to invest relatively small amounts of money on a regular basis. 
D)  All of the above are correct. 
E)  Only A and B are correct. 
A)  Most small investors don't have the time, knowledge or desire to do the research necessary to purchase individual stocks. 
B)  Mutual fund transaction fees are considerably lower than the brokerage fees most small investors incur buying and selling individual stocks. 
C)  Most small investors want to be able to invest relatively small amounts of money on a regular basis. 
D)  All of the above are correct. 
E)  Only A and B are correct.

Question 18

If you want to invest only in the telecommunications industry,which fund would be appropriate for you?

Accepted Answer

A)  S&P 500 Index fund 
B)  Telecommunications sector fund 
C)  Telecommunications ETF 
D)  Telecommunications money market fund 
E)  Both B and C are correct. 
A)  S&P 500 Index fund 
B)  Telecommunications sector fund 
C)  Telecommunications ETF 
D)  Telecommunications money market fund 
E)  Both B and C are correct.

Question 19

The potential lower returns on mutual funds versus the potential returns on individual stocks is due to poor performance by the fund managers.

Accepted Answer

A) True 
 B)False

Question 20

Most small investors don't have the time,expertise,or desire to do the research necessary to invest in individual stocks therefore mutual funds are a good solution.

Accepted Answer

A) True 
 B)False

The term "open end" mutual fund means that this type of investment company can issue an unlimited number of ownership shares.

A mutual fund that does not charge a commission on your ownership shares is referred to as a load fund.

Shares in open-end mutual funds are actively traded in secondary markets.

How is an asset allocation fund different from a balanced mutual fund?

A(n)________ is a mutual fund company that has the ability to issue as many shares as investors are willing to purchase.

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.

When you own shares in a mutual fund,you directly own shares of the companies that make up the fund.

Money market mutual funds invest primarily in the stocks of publicly traded companies.

Which of the following are passed on to fund share holders through 12b-1 fees?

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

Money market mutual funds

What are the four choices for purchasing a mutual fund?

A unit investment trust usually invests in and an REIT always invests in .

What is the total return for a mutual fund with the following characteristics? beginning NAV = $55.82 Ending NAV = $70.52 Dividends distributed = $2.25 Capital gains distributed = $3.50

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.

Provide a list of sources of information to evaluate mutual funds.

Which of the following is a benefit to investing in a mutual fund?

If you want to invest only in the telecommunications industry,which fund would be appropriate for you?

The potential lower returns on mutual funds versus the potential returns on individual stocks is due to poor performance by the fund managers.

Most small investors don't have the time,expertise,or desire to do the research necessary to invest in individual stocks therefore mutual funds are a good solution.

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

The term "open end" mutual fund means that this type of investment company can issue an unlimited number of ownership shares.

A mutual fund that does not charge a commission on your ownership shares is referred to as a load fund.

Shares in open-end mutual funds are actively traded in secondary markets.

How is an asset allocation fund different from a balanced mutual fund?

A(n)________ is a mutual fund company that has the ability to issue as many shares as investors are willing to purchase.

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.

When you own shares in a mutual fund,you directly own shares of the companies that make up the fund.

Money market mutual funds invest primarily in the stocks of publicly traded companies.

Which of the following are passed on to fund share holders through 12b-1 fees?

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

Money market mutual funds

What are the four choices for purchasing a mutual fund?

A unit investment trust usually invests in ________ and an REIT always invests in ________.

What is the total return for a mutual fund with the following characteristics? beginning NAV = $55.82 Ending NAV = $70.52 Dividends distributed = $2.25 Capital gains distributed = $3.50

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.

Provide a list of sources of information to evaluate mutual funds.

Which of the following is a benefit to investing in a mutual fund?

If you want to invest only in the telecommunications industry,which fund would be appropriate for you?

The potential lower returns on mutual funds versus the potential returns on individual stocks is due to poor performance by the fund managers.

Most small investors don't have the time,expertise,or desire to do the research necessary to invest in individual stocks therefore mutual funds are a good solution.

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

A unit investment trust usually invests in and an REIT always invests in .