Question 1

A major benefit of mutual funds to small investors is diversification.

Accepted Answer

A) True 
 B)False  True

Question 2

A(n)_____ is a service offered by mutual funds that helps an investor earn compound interest on their investments.

Accepted Answer

A) retirement plan 
B) deferred withdrawal plan 
C) automatic reinvestment plan 
D) conversion privilege 
E) standard investment plan 
A) retirement plan 
B) deferred withdrawal plan 
C) automatic reinvestment plan 
D) conversion privilege 
E) standard investment plan C

Question 3

In the online quotes from The Wall Street Journal's listing of mutual funds,an "r" after the mutual fund name means that the particular mutual fund has a _____ associated with it.

Accepted Answer

A) front-end load 
B) back-end load 
C) 12(b)-1 fee 
D) management fee 
E) distribution load 
A) front-end load 
B) back-end load 
C) 12(b)-1 fee 
D) management fee 
E) distribution load B

Question 4

A(n)_____ actually runs the portfolio and makes the buy and sell decisions.

Accepted Answer

A) transfer agent 
B) distributor 
C) investment advisor 
D) regulator 
E) custodian 
A) transfer agent 
B) distributor 
C) investment advisor 
D) regulator 
E) custodian

Question 5

The current market value of all the securities a mutual fund owns,less any liabilities,on a pershare basis is known as the fund's:

Accepted Answer

A) compounded value. 
B) par value. 
C) net asset value. 
D) book value. 
E) liquidation value. 
A) compounded value. 
B) par value. 
C) net asset value. 
D) book value. 
E) liquidation value.

Question 6

Dividend income and capital gains distributions are taxed at identical tax rates.

Accepted Answer

A) True 
 B)False

Question 7

A fund that invests only in a particular industry would be a _____ fund.

Accepted Answer

A) money market 
B) maximum capital 
C) sector 
D) balanced 
E) bond 
A) money market 
B) maximum capital 
C) sector 
D) balanced 
E) bond

Question 8

Speculating in raw land is highly risky.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a reason to invest in mutual funds?

Accepted Answer

A) Mutual funds are free of any hidden costs. 
B) Mutual funds earn tax-free returns. 
C) Mutual funds provide a guaranteed return in spite of market risks. 
D) Mutual funds provide diversification of invested funds. 
E) Mutual funds are always issued as no-load funds. 
A) Mutual funds are free of any hidden costs. 
B) Mutual funds earn tax-free returns. 
C) Mutual funds provide a guaranteed return in spite of market risks. 
D) Mutual funds provide diversification of invested funds. 
E) Mutual funds are always issued as no-load funds.

Question 10

A(n)__________ real estate investment trust (REIT)would invest in income-producing properties and mortgage loans. ​

Accepted Answer

A) hybrid 
B) mortgage 
C) equity 
D) spider 
A) hybrid 
B) mortgage 
C) equity 
D) spider

Question 11

An investor with a small amount of money should stick to using load funds instead of no-load funds.

Accepted Answer

A) True 
 B)False

Question 12

RACE Mutual fund is a no-load fund that had a net asset value of $25.60 one year ago.Today,the net asset value (NAV)is $28.83.During the year,dividends of $0.72 were paid out and a capital gain distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

Accepted Answer

Approximate yield = {Dividends and capit

Question 13

Both load and no-load funds always charge a:

Accepted Answer

A) transaction fee. 
B) 12(b)-1 fee. 
C) management fee. 
D) fee on the sale of the shares. 
E) redemption fee. 
A) transaction fee. 
B) 12(b)-1 fee. 
C) management fee. 
D) fee on the sale of the shares. 
E) redemption fee.

Question 14

Dividend income,capital gains distributions received,and changes in the fund's share price are all sources of returns for a mutual fund investor.

Accepted Answer

A) True 
 B)False

Question 15

The actual ownership of a mutual fund is in the hands of the __________. ​

Accepted Answer

A) management company 
B) custodians 
C) shareholders 
D) distributors 
A) management company 
B) custodians 
C) shareholders 
D) distributors

Question 16

The most important advantage of a mutual fund is pooled diversification.

Accepted Answer

A) True 
 B)False

Question 17

A fund's objective must be stated in its prospectus.

Accepted Answer

A) True 
 B)False

Question 18

Having money taken at regular intervals from your paycheck and put into a mutual fund is an example of:

Accepted Answer

A) an automatic investment plan. 
B) an authorized deduction plan. 
C) a systematic withdrawal plan. 
D) a conversion privilege. 
E) a retirement plan. 
A) an automatic investment plan. 
B) an authorized deduction plan. 
C) a systematic withdrawal plan. 
D) a conversion privilege. 
E) a retirement plan.

Question 19

_____ funds are balanced funds that automatically change the asset allocation from more to less equity exposure as an investor ages.

Accepted Answer

A) Bond 
B) Aggressive growth 
C) Value 
D) Life 
E) Intermediate-term 
A) Bond 
B) Aggressive growth 
C) Value 
D) Life 
E) Intermediate-term

Question 20

Leverage means:

Accepted Answer

A) using borrowed money to magnify returns. 
B) paying only cash for any investment purchase. 
C) investing in highly speculative securities. 
D) purchasing securities at a premium price. 
E) selling investments before their maturity. 
A) using borrowed money to magnify returns. 
B) paying only cash for any investment purchase. 
C) investing in highly speculative securities. 
D) purchasing securities at a premium price. 
E) selling investments before their maturity.

A major benefit of mutual funds to small investors is diversification.

A(n)_____ is a service offered by mutual funds that helps an investor earn compound interest on their investments.

In the online quotes from The Wall Street Journal's listing of mutual funds,an "r" after the mutual fund name means that the particular mutual fund has a _____ associated with it.

A(n)_____ actually runs the portfolio and makes the buy and sell decisions.

The current market value of all the securities a mutual fund owns,less any liabilities,on a pershare basis is known as the fund's:

Dividend income and capital gains distributions are taxed at identical tax rates.

A fund that invests only in a particular industry would be a _____ fund.

Speculating in raw land is highly risky.

Which of the following is a reason to invest in mutual funds?

A(n)__________ real estate investment trust (REIT)would invest in income-producing properties and mortgage loans.

An investor with a small amount of money should stick to using load funds instead of no-load funds.

RACE Mutual fund is a no-load fund that had a net asset value of $25.60 one year ago.Today,the net asset value (NAV)is $28.83.During the year,dividends of $0.72 were paid out and a capital gain distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

Both load and no-load funds always charge a:

Dividend income,capital gains distributions received,and changes in the fund's share price are all sources of returns for a mutual fund investor.

The actual ownership of a mutual fund is in the hands of the __________.

The most important advantage of a mutual fund is pooled diversification.

A fund's objective must be stated in its prospectus.

Having money taken at regular intervals from your paycheck and put into a mutual fund is an example of:

_____ funds are balanced funds that automatically change the asset allocation from more to less equity exposure as an investor ages.

Leverage means:

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters

Exam 13: Investing in Mutual Funds, ETFS and Real Estate

A major benefit of mutual funds to small investors is diversification.

A(n)_____ is a service offered by mutual funds that helps an investor earn compound interest on their investments.

In the online quotes from The Wall Street Journal's listing of mutual funds,an "r" after the mutual fund name means that the particular mutual fund has a _____ associated with it.

A(n)_____ actually runs the portfolio and makes the buy and sell decisions.

The current market value of all the securities a mutual fund owns,less any liabilities,on a pershare basis is known as the fund's:

Dividend income and capital gains distributions are taxed at identical tax rates.

A fund that invests only in a particular industry would be a _____ fund.

Speculating in raw land is highly risky.

Which of the following is a reason to invest in mutual funds?

A(n)__________ real estate investment trust (REIT)would invest in income-producing properties and mortgage loans. ​

An investor with a small amount of money should stick to using load funds instead of no-load funds.

RACE Mutual fund is a no-load fund that had a net asset value of $25.60 one year ago.Today,the net asset value (NAV)is $28.83.During the year,dividends of $0.72 were paid out and a capital gain distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

Both load and no-load funds always charge a:

Dividend income,capital gains distributions received,and changes in the fund's share price are all sources of returns for a mutual fund investor.

The actual ownership of a mutual fund is in the hands of the __________. ​

The most important advantage of a mutual fund is pooled diversification.

A fund's objective must be stated in its prospectus.

Having money taken at regular intervals from your paycheck and put into a mutual fund is an example of:

_____ funds are balanced funds that automatically change the asset allocation from more to less equity exposure as an investor ages.

Leverage means:

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters

A(n)__________ real estate investment trust (REIT)would invest in income-producing properties and mortgage loans.

The actual ownership of a mutual fund is in the hands of the __________.