Exam 5: Mutual Funds

A mutual fund with $5.4 million in assets has 250,000 shares outstanding. If the fund has liabilities of $420,000, what is the NAV of the fund?

You are in the 32 percent tax bracket. If a non-taxable money market fund has a return of 3.8 percent, what return would you require on a taxable fund?

What is the "high water mark" for a hedge fund manager to receive the portion of their fee based on performance?

Which of the following is not a reason to pay fees and expenses associated with mutual funds?

A(n) ___________ is a fee charged on the initial purchase of a mutual fund, for example, a 5% of the offering price.

Which of the following fees and expenses are most important for long-term investors? I. Management fees. II. Front-end loads. III. Deferred sales charges. IV. Annual administrative fees.

You have owned shares in the Scotia Stock Fund for years. Now, you decide to redeem your shares and invest in the Scotia Bond Fund. Usually, the fund sponsor is willing to waive the ___________ fee for this transaction.

Which of the following funds would be most likely to invest mainly in small, risky stocks?

Why do the performance fees of hedge fund managers often have a "high water mark" constraint?

You invested $2,000 in a mutual fund 20 months ago when the NAV of the fund was $18.90. You have not acquired or sold any shares since that time. Today, the NAV has risen to $19.40. The fund has no front-end load, but charges a contingent deferred sales charges of 5%, 5%, 4%, 3%, 2%, and 1% if the shares are redeemed within the first 6 years, respectively. How much money will you receive if you redeem your shares today?

The management fee for a mutual fund is measured as a percentage of its:

Money market mutual funds

An index fund designed to mimic the performance of a market index such as the S&P/TSX 60 Index in which shares are priced and traded on public exchanges and the fund will buy or sell shares directly in large blocks is a(n):

How do open-end and closed-end mutual funds differ? How do closed-end funds offer the potential for an 'extra' return?

A ___________ fund allows the fund manager to vary the investment percentage of stocks, bonds, and money market instruments based upon the manager's view.

A document that contains specific information regarding a mutual fund, such as expenses, holdings, objective, management, etc., is called a(n):

A mutual fund has $380 million in assets and an offering price of $64.10. If the fund has a front-end load of 3.5 percent, approximately how many shares of the fund are outstanding? This fund has no liabilities.

Which of the following is false concerning the money market mutual funds?

You invest $10,000 in a mutual fund with a NAV of $51.34 and a front-end load of 4 percent. How many shares will you purchase?

You are going to invest in the AIC Stock Fund that has A, B, and C share classes. All share classes have a thirty basis point management fee. The A shares have a five percent front-end load and no annual administrative fee. The B shares have a three percent back-end load and a seventy-five basis point annual administrative fee. The C shares have no load and a one hundred basis point annual administrative fee. If your investment horizon is thirty years, the ___________ shares would be the best alternative.