Question 1

Bond funds differ from individual bond purchases in that

Accepted Answer

A)  bond funds offer less liquidity than individual bonds. 
B)  with a bond fund, you don't get professional management. 
C)  the bond fund doesn't mature as individual bonds do. 
D)  all of the above. 
A)  bond funds offer less liquidity than individual bonds. 
B)  with a bond fund, you don't get professional management. 
C)  the bond fund doesn't mature as individual bonds do. 
D)  all of the above.

Question 2

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 3

One disadvantage of mutual fund investments is that they are illiquid.

Accepted Answer

A) True 
 B)False

Question 4

Mutual fund shareholders directly own the fund's securities.

Accepted Answer

A) True 
 B)False

Question 5

What information can an investor find in the prospectus of a mutual fund?

Accepted Answer

A)  The fund's goal and investment strategy 
B)  The fund manager's past experience 
C)  The fund's 12b-1 fees 
D)  All of the above are correct. 
E)  Only A and B are correct. 
A)  The fund's goal and investment strategy 
B)  The fund manager's past experience 
C)  The fund's 12b-1 fees 
D)  All of the above are correct. 
E)  Only A and B are correct.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Back-end load mutual funds charge a commission when the investor sells the mutual fund.

Accepted Answer

A) True 
 B)False

Question 8

Mutual fund fees and expenses will negatively affect the return you receive on your investment.

Accepted Answer

A) True 
 B)False

Question 9

All mutual funds carry the same level of diversification and exposure to risk.

Accepted Answer

A) True 
 B)False

Question 10

Exchange traded funds are mutual funds that trade on an exchange just like individual securities and can be bought or sold throughout the trading day.

Accepted Answer

A) True 
 B)False

Question 11

An equity REIT investment is limited to mortgages on income producing properties.

Accepted Answer

A) True 
 B)False

Question 12

Mutual funds eliminate the systematic risk through diversification.

Accepted Answer

A) True 
 B)False

Question 13

By law,a bond fund may not invest in international securities.

Accepted Answer

A) True 
 B)False

Question 14

Life cycle funds

Accepted Answer

A)  are designed for people with at least 20 years until retirement. 
B)  require you to decide how to allocate your investment among stocks, bonds, and money market instruments. 
C)  grow less conservative as your retirement date nears. 
D)  try to tailor their holding to the investor's individual age, and risk tolerance. 
A)  are designed for people with at least 20 years until retirement. 
B)  require you to decide how to allocate your investment among stocks, bonds, and money market instruments. 
C)  grow less conservative as your retirement date nears. 
D)  try to tailor their holding to the investor's individual age, and risk tolerance.

Question 15

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 16

A(n)________ is a fixed pool of securities,generally municipal bonds,with each unit representing a proportionate ownership in that pool.

Accepted Answer

A)  open-end investment company 
B)  closed-end mutual fund 
C)  unit investment trust 
D)  real estate investment trust 
A)  open-end investment company 
B)  closed-end mutual fund 
C)  unit investment trust 
D)  real estate investment trust

Question 17

Tabitha is just beginning to develop her financial portfolio.She does not want to pay commissions to purchase shares in mutual funds,as her friend you would advise her to invest her dollars in ________ funds.

Accepted Answer

A)  load 
B)  front-load 
C)  back-load 
D)  no-load 
E)  side-load 
A)  load 
B)  front-load 
C)  back-load 
D)  no-load 
E)  side-load

Question 18

According to the Keown book,mutual funds are a great way to invest.Once you have the minimum amount saved-about $3,000 for most Vanguard mutual funds-it's time to start investing.What are a few factors to keep in mind?

Accepted Answer

Goals.Set up your investment plan to mee

Question 19

Principle 8 tells us that diversification reduces

Accepted Answer

A)  risk. 
B)  costs. 
C)  profitability. 
D)  earnings. 
E)  none of the above. 
A)  risk. 
B)  costs. 
C)  profitability. 
D)  earnings. 
E)  none of the above.

Question 20

When selecting a mutual fund,since past performance doesn't necessarily predict future results,you don't need to look at the fund's past performance.

Accepted Answer

A) True 
 B)False

Bond funds differ from individual bond purchases in that

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

One disadvantage of mutual fund investments is that they are illiquid.

Mutual fund shareholders directly own the fund's securities.

What information can an investor find in the prospectus of a mutual fund?

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

Back-end load mutual funds charge a commission when the investor sells the mutual fund.

Mutual fund fees and expenses will negatively affect the return you receive on your investment.

All mutual funds carry the same level of diversification and exposure to risk.

Exchange traded funds are mutual funds that trade on an exchange just like individual securities and can be bought or sold throughout the trading day.

An equity REIT investment is limited to mortgages on income producing properties.

Mutual funds eliminate the systematic risk through diversification.

By law,a bond fund may not invest in international securities.

Life cycle funds

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

A(n)________ is a fixed pool of securities,generally municipal bonds,with each unit representing a proportionate ownership in that pool.

Tabitha is just beginning to develop her financial portfolio.She does not want to pay commissions to purchase shares in mutual funds,as her friend you would advise her to invest her dollars in ________ funds.

According to the Keown book,mutual funds are a great way to invest.Once you have the minimum amount saved-about $3,000 for most Vanguard mutual funds-it's time to start investing.What are a few factors to keep in mind?

Principle 8 tells us that diversification reduces

When selecting a mutual fund,since past performance doesn't necessarily predict future results,you don't need to look at the fund's past performance.

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

Bond funds differ from individual bond purchases in that

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

One disadvantage of mutual fund investments is that they are illiquid.

Mutual fund shareholders directly own the fund's securities.

What information can an investor find in the prospectus of a mutual fund?

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

Back-end load mutual funds charge a commission when the investor sells the mutual fund.

Mutual fund fees and expenses will negatively affect the return you receive on your investment.

All mutual funds carry the same level of diversification and exposure to risk.

Exchange traded funds are mutual funds that trade on an exchange just like individual securities and can be bought or sold throughout the trading day.

An equity REIT investment is limited to mortgages on income producing properties.

Mutual funds eliminate the systematic risk through diversification.

By law,a bond fund may not invest in international securities.

Life cycle funds

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

A(n)________ is a fixed pool of securities,generally municipal bonds,with each unit representing a proportionate ownership in that pool.

Tabitha is just beginning to develop her financial portfolio.She does not want to pay commissions to purchase shares in mutual funds,as her friend you would advise her to invest her dollars in ________ funds.

According to the Keown book,mutual funds are a great way to invest.Once you have the minimum amount saved-about $3,000 for most Vanguard mutual funds-it's time to start investing.What are a few factors to keep in mind?

Principle 8 tells us that diversification reduces

When selecting a mutual fund,since past performance doesn't necessarily predict future results,you don't need to look at the fund's past performance.

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