Question 1

Closed-end funds are frequently issued at a ______ to NAV and subsequently trade at a __________ to NAV.

Accepted Answer

A)  discount; discount 
B)  discount; premium 
C)  premium; premium 
D)  premium; discount 
E)  No consistent relationship has been observed. 
A)  discount; discount 
B)  discount; premium 
C)  premium; premium 
D)  premium; discount 
E)  No consistent relationship has been observed. A

Question 2

You purchased shares of a mutual fund at a price of $12 per share at the beginning of the year and paid a front-end load of 4.75%. If the securities in which the fund invested increased in value by 9% during the year, and the fund's expense ratio was 1.5%, your return if you sold the fund at the end of the year would be

Accepted Answer

A)  4.75%. 
B)  3.54%. 
C)  2.65%. 
D)  2.39%. 
A)  4.75%. 
B)  3.54%. 
C)  2.65%. 
D)  2.39%. D

Question 3

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?

Accepted Answer

A)  21,619,346.92 
B)  22,930,546.28 
C)  24,860,161.59 
D)  25,693,645.25 
A)  21,619,346.92 
B)  22,930,546.28 
C)  24,860,161.59 
D)  25,693,645.25 C

Question 4

The fee that mutual funds use to help pay for advertising and promotional literature is called a

Accepted Answer

A)  front-end load fee. 
B)  back-end load fee. 
C)  operating expense fee. 
D)  12b-1 fee. 
E)  structured fee. 
A)  front-end load fee. 
B)  back-end load fee. 
C)  operating expense fee. 
D)  12b-1 fee. 
E)  structured fee.

Question 5

Assume that you purchased shares of a mutual fund at a net asset value of $14.50 per share. During the year, you received dividend income distributions of $0.27 per share and capital gains distributions of $0.65 per share. At the end of the year, the shares had a net asset value of $13.74 per share. What was your rate of return on this investment?

Accepted Answer

A)  2.91% 
B)  3.07% 
C)  1.10% 
D)  1.78% 
E)  -1.18% 
A)  2.91% 
B)  3.07% 
C)  1.10% 
D)  1.78% 
E)  -1.18%

Question 6

A mutual fund had year-end assets of $437,000,000 and liabilities of $37,000,000. If the fund NAV was $60.12, how many shares must have been held in the fund?

Accepted Answer

A)  6,653,360 
B)  8,412,642 
C)  10,165,476 
D)  9,165,414 
E)  9,219,160 
A)  6,653,360 
B)  8,412,642 
C)  10,165,476 
D)  9,165,414 
E)  9,219,160

Question 7

A mutual fund had NAV per share of $37.12 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 11.0%. Income distributions were $2.26, and the fund had capital gain distributions of $1.64. Without considering taxes and transactions costs, what ending NAV would you calculate?

Accepted Answer

A)  $37.93 
B)  $34.52 
C)  $37.30 
D)  $47.25 
E)  $36.28 
A)  $37.93 
B)  $34.52 
C)  $37.30 
D)  $47.25 
E)  $36.28

Question 8

Which one of the following statements regarding closed-end mutual funds is false?

Accepted Answer

A)  The funds always trade at a discount from NAV. 
B)  The funds redeem shares at their net asset value. 
C)  The funds offer investors professional management. 
D)  The funds always trade at a discount from NAV and redeem shares at their net asset value. 
E)  None of the options are correct. 
A)  The funds always trade at a discount from NAV. 
B)  The funds redeem shares at their net asset value. 
C)  The funds offer investors professional management. 
D)  The funds always trade at a discount from NAV and redeem shares at their net asset value. 
E)  None of the options are correct.

Question 9

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?

Accepted Answer

A)  21,619,346.92 
B)  22,930,546.28 
C)  24,860,161.59 
D)  25,693,645.25 
A)  21,619,346.92 
B)  22,930,546.28 
C)  24,860,161.59 
D)  25,693,645.25

Question 10

The Yachtsman Fund had NAV per share of $36.12 on January 1, 2016. On December 31 of the same year, the fund's NAV was $39.71. Income distributions were $0.64, and the fund had capital gain distributions of $1.13. Without considering taxes and transactions costs, what rate of return did an investor receive on the Yachtsman Fund last year?

Accepted Answer

A)  22.92% 
B)  17.68% 
C)  14.39% 
D)  18.52% 
E)  14.84% 
A)  22.92% 
B)  17.68% 
C)  14.39% 
D)  18.52% 
E)  14.84%

Question 11

Commingled funds are

Accepted Answer

A)  amounts invested in equity and fixed-income mutual funds. 
B)  funds that may be purchased at intervals of 3, 6, or 12 months at the discretion of management. 
C)  amounts invested in domestic and global equities. 
D)  closed-end funds that may be repurchased only once every two years at the discretion of mutual fund management. 
E)  partnerships of investors that pool their funds, which are then managed for a fee. 
A)  amounts invested in equity and fixed-income mutual funds. 
B)  funds that may be purchased at intervals of 3, 6, or 12 months at the discretion of management. 
C)  amounts invested in domestic and global equities. 
D)  closed-end funds that may be repurchased only once every two years at the discretion of mutual fund management. 
E)  partnerships of investors that pool their funds, which are then managed for a fee.

Question 12

You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 5.75%. If the securities in which the fund invested increased in value by 11% during the year, and the fund's expense ratio was 1.25%, your return if you sold the fund at the end of the year would be

Accepted Answer

A)  4.33%. 
B)  3.44%. 
C)  2.45%. 
D)  6.87%. 
A)  4.33%. 
B)  3.44%. 
C)  2.45%. 
D)  6.87%.

Question 13

A mutual fund had NAV per share of $16.75 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 26.6%. Income distributions were $1.79, and the fund had capital gain distributions of $2.80. Without considering taxes and transactions costs, what ending NAV would you calculate?

Accepted Answer

A)  $17.44 
B)  $13.28 
C)  $14.96 
D)  $17.25 
E)  $16.62 
A)  $17.44 
B)  $13.28 
C)  $14.96 
D)  $17.25 
E)  $16.62

Question 14

A mutual fund had NAV per share of $26.25 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 16.4%. Income distributions were $1.27, and the fund had capital gain distributions of $1.85. Without considering taxes and transactions costs, what ending NAV would you calculate?

Accepted Answer

A)  $27.44 
B)  $33.88 
C)  $24.69 
D)  $42.03 
E)  $16.62 
A)  $27.44 
B)  $33.88 
C)  $24.69 
D)  $42.03 
E)  $16.62

Question 15

A mutual fund had NAV per share of $37.12 on January 1, 2016. On December 31 of the same year, the fund's rate of return for the year was 11.0%. Income distributions were $2.26, and the fund had capital gain distributions of $1.64. Without considering taxes and transactions costs, what ending NAV would you calculate?

Accepted Answer

A)  $37.93 
B)  $34.52 
C)  $37.30 
D)  $47.25 
E)  $36.28 
A)  $37.93 
B)  $34.52 
C)  $37.30 
D)  $47.25 
E)  $36.28

Question 16

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Nasdaq 100 should choose

Accepted Answer

A)  SPY. 
B)  DIA. 
C)  QQQ. 
D)  IWM. 
E)  VTI. 
A)  SPY. 
B)  DIA. 
C)  QQQ. 
D)  IWM. 
E)  VTI.

Question 17

Assume that you purchased shares of a mutual fund at a net asset value of $14.50 per share. During the year, you received dividend income distributions of $0.27 per share and capital gains distributions of $0.65 per share. At the end of the year, the shares had a net asset value of $13.74 per share. What was your rate of return on this investment?

Accepted Answer

A)  2.91% 
B)  3.07% 
C)  1.10% 
D)  1.78% 
E)  -1.18% 
A)  2.91% 
B)  3.07% 
C)  1.10% 
D)  1.78% 
E)  -1.18%

Question 18

A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value?

Accepted Answer

A)  $22.87 
B)  $22.39 
C)  $22.24 
D)  $17.61 
E)  $19.25 
A)  $22.87 
B)  $22.39 
C)  $22.24 
D)  $17.61 
E)  $19.25

Question 19

A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value?

Accepted Answer

A)  $22.87 
B)  $22.39 
C)  $22.24 
D)  $17.61 
E)  $19.25 
A)  $22.87 
B)  $22.39 
C)  $22.24 
D)  $17.61 
E)  $19.25

Question 20

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the MSCI France Index should choose

Accepted Answer

A)  SPY. 
B)  EWJ. 
C)  EWQ. 
D)  IWM. 
E)  VTI. 
A)  SPY. 
B)  EWJ. 
C)  EWQ. 
D)  IWM. 
E)  VTI.

Closed-end funds are frequently issued at a to NAV and subsequently trade at a ____ to NAV.

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?

The fee that mutual funds use to help pay for advertising and promotional literature is called a

A mutual fund had year-end assets of $437,000,000 and liabilities of $37,000,000. If the fund NAV was $60.12, how many shares must have been held in the fund?

Which one of the following statements regarding closed-end mutual funds is false?

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?

Commingled funds are

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Nasdaq 100 should choose

A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value?

A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value?

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the MSCI France Index should choose

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

Exam 4: Mutual Funds and Other Investment Companies

Closed-end funds are frequently issued at a ______ to NAV and subsequently trade at a __________ to NAV.

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?

The fee that mutual funds use to help pay for advertising and promotional literature is called a

A mutual fund had year-end assets of $437,000,000 and liabilities of $37,000,000. If the fund NAV was $60.12, how many shares must have been held in the fund?

Which one of the following statements regarding closed-end mutual funds is false?

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?

Commingled funds are

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the Nasdaq 100 should choose

A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value?

A mutual fund had year-end assets of $560,000,000 and liabilities of $26,000,000. There were 23,850,000 shares in the fund at year end. What was the mutual fund's net asset value?

Of the following types of ETFs, an investor who wishes to invest in a diversified portfolio that tracks the MSCI France Index should choose

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

Closed-end funds are frequently issued at a to NAV and subsequently trade at a ____ to NAV.