Exam 14: Mutual Funds: An Easy Way to Diversify

The mutual fund that invests in Treasury bills and very short-term notes and is considered practically risk free is the

A balanced mutual fund is aimed at investors who want

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

When you own shares of a mutual fund,you can choose to have the dividend and capital gains distributions paid directly to you in the form of cash or you can choose to have them reinvested into additional shares of the fund itself.

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

Which of the following mutual fund services is similar in concept to compounding and the time value of money?

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

Each individual mutual fund hires an investment advisor,generally from the management company,who oversee the particular fund.How is this advisor paid?

Which of the following is a disadvantage to mutual fund investing?

You purchased 100 shares of Gibraltar Strength Fund for $20.50 per share.As a result of distribution reinvestment you currently own 120 shares with a NAV of $22.75 per share.What is your total return?

Which of the following funds would be the most appropriate investment for the average small investor?

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

Tax-exempt money market mutual funds invest in only very short-term municipal debt.

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

Zippo Mutual Fund is one of your best performers.It just announced a year-end distribution of $2.50 per share in capital gains and $4.25 in dividends.Assuming the NAV increased from $31.50 to $43.75,calculate your total annual return.

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

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?

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

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

Which of the following will affect your capital gains liability?