Question 1

A(n) ___________ fund issues a fixed number of shares that are bought and sold in the open secondary market. The fund capitalization is fixed unless a new public offering is made.

Accepted Answer

A)  money market 
B)  open-end 
C)  stock mutual 
D)  closed-end 
E)  exchange-traded 
A)  money market 
B)  open-end 
C)  stock mutual 
D)  closed-end 
E)  exchange-traded

Question 2

A closed-end mutual fund has $300 million in assets and sells for a 10.5 percent discount to NAV. If the NAV is $10.28, what price are the fund shares?

Accepted Answer

A)  $9.87 
B)  $9.20 
C)  $10.04 
D)  $11.36 
E)  $10.28 
A)  $9.87 
B)  $9.20 
C)  $10.04 
D)  $11.36 
E)  $10.28

Question 3

Mutual fund turnover is measured as:

Accepted Answer

A)  total funds sales divided by total fund asset. 
B)  the lesser of fund sales or purchases divided by end of period assets. 
C)  total fund purchases divided by average daily assets. 
D)  the lesser of fund sales or purchases divided by average daily assets. 
E)  average daily assets divided by the lesser of fund sales or purchases. 
A)  total funds sales divided by total fund asset. 
B)  the lesser of fund sales or purchases divided by end of period assets. 
C)  total fund purchases divided by average daily assets. 
D)  the lesser of fund sales or purchases divided by average daily assets. 
E)  average daily assets divided by the lesser of fund sales or purchases.

Question 4

___________ are asset-holding units of companies using their expertise to generate income for investors.

Accepted Answer

A)  Special-purpose vehicles 
B)  Special-drawing rights 
C)  Income trusts 
D)  Self-regulatory organizations 
E)  Wealth management teams 
A)  Special-purpose vehicles 
B)  Special-drawing rights 
C)  Income trusts 
D)  Self-regulatory organizations 
E)  Wealth management teams

Question 5

ABC Fund has an offer price of $21.60 and a front-end load of 2%. What is its net asset value per share?

Accepted Answer

A)  $21.17 
B)  $21.42 
C)  $21.87 
D)  $22.26 
E)  $19.53 
A)  $21.17 
B)  $21.42 
C)  $21.87 
D)  $22.26 
E)  $19.53

Question 6

To avoid taxation, tax-managed fund manager must:

Accepted Answer

A)  match realized gains with realized losses. 
B)  hold down turnover to minimize taxable capital gain. 
C)  focus on the tax liabilities of fund owners. 
D)  emphasize earnings and cash flows. 
E)  all of the above. 
A)  match realized gains with realized losses. 
B)  hold down turnover to minimize taxable capital gain. 
C)  focus on the tax liabilities of fund owners. 
D)  emphasize earnings and cash flows. 
E)  all of the above.

Question 7

Which of the following mutual funds might try to time the market to achieve superior performance?

Accepted Answer

A)  Equity income funds. 
B)  Capital appreciation fund. 
C)  Growth and Income funds. 
D)  Small company stock fund. 
E)  Asset allocation funds. 
A)  Equity income funds. 
B)  Capital appreciation fund. 
C)  Growth and Income funds. 
D)  Small company stock fund. 
E)  Asset allocation funds.

Question 8

The money market deposit accounts are primarily bank deposits where the funds will be protected up to $100,000 of loss by the ___________.

Accepted Answer

A)  CIPF 
B)  CPA 
C)  IDA 
D)  CHMC 
E)  CDIC 
A)  CIPF 
B)  CPA 
C)  IDA 
D)  CHMC 
E)  CDIC

Question 9

___________ is a measure of the trading activity of a mutual fund over a period.

Accepted Answer

A)  DSC 
B)  Turnover 
C)  Spread 
D)  Maintenance fee 
E)  Yield-to-maturity 
A)  DSC 
B)  Turnover 
C)  Spread 
D)  Maintenance fee 
E)  Yield-to-maturity

Question 10

An open-end fund that invests strictly in short-term, high-quality, low-risk securities is called a(n) ___________ mutual fund.

Accepted Answer

A)  stock 
B)  money market 
C)  exchange traded fund 
D)  closed-end 
E)  bond 
A)  stock 
B)  money market 
C)  exchange traded fund 
D)  closed-end 
E)  bond

Question 11

A hedge fund may charge a special performance fee that is frequently equal to:

Accepted Answer

A)  10% - 15% of NAV 
B)  15% - 20% of NAV 
C)  20% - 30% of NAV 
D)  20% - 40% of the market price 
E)  20% - 40% of the fund's profits 
A)  10% - 15% of NAV 
B)  15% - 20% of NAV 
C)  20% - 30% of NAV 
D)  20% - 40% of the market price 
E)  20% - 40% of the fund's profits

Question 12

How the price of the shares is determined for a closed-end investment company?

Accepted Answer

A)  Usually sell at a premium to net asset value. 
B)  Equal to NAV plus a load charge. 
C)  Determine by the supply and demand in the marketplace. 
D)  Equal to the net value per share. 
E)  Equal to net asset value less redemption. 
A)  Usually sell at a premium to net asset value. 
B)  Equal to NAV plus a load charge. 
C)  Determine by the supply and demand in the marketplace. 
D)  Equal to the net value per share. 
E)  Equal to net asset value less redemption.

Question 13

A mutual fund has a NAV of $46.20 at the beginning of the year. The fund distributes a dividend of $0.32 and a capital gain of $0.87 at the end of the year. If you purchased 2,000 shares at the beginning of the year and the end of year NAV was $49.10, what was your return for the year?

Accepted Answer

A)  6.97% 
B)  8.85% 
C)  8.16% 
D)  6.28% 
E)  8.34% 
A)  6.97% 
B)  8.85% 
C)  8.16% 
D)  6.28% 
E)  8.34%

Question 14

A mutual fund is owned by:

Accepted Answer

A)  fund management. 
B)  the fund family. 
C)  the board of directors. 
D)  shareholders. 
E)  the fund investment advisor. 
A)  fund management. 
B)  the fund family. 
C)  the board of directors. 
D)  shareholders. 
E)  the fund investment advisor.

Question 15

An income trust has a return of 6.2 percent and it is able to redistribute the income to the unit-holders. If you are in the 32 percent tax rate, what is the equivalent after tax yield?

Accepted Answer

A)  1.98% 
B)  3.85% 
C)  4.22% 
D)  4.49% 
E)  4.62% 
A)  1.98% 
B)  3.85% 
C)  4.22% 
D)  4.49% 
E)  4.62%

Question 16

A fund's turnover is a measure of the fund's ___________ during a year.

Accepted Answer

A)  Trading activity 
B)  Total fees charged 
C)  Change in senior investment managers 
D)  Rate of return 
E)  Number of shares outstanding 
A)  Trading activity 
B)  Total fees charged 
C)  Change in senior investment managers 
D)  Rate of return 
E)  Number of shares outstanding

Question 17

Empirical researches on investment companies indicate that:

Accepted Answer

A)  load funds outperform no-load funds. 
B)  larger funds beat smaller funds. 
C)  they have done slightly better than the market after netting out transaction costs. 
D)  individual funds cannot consistently outperform the market. 
E)  funds with more turnovers outperform those having fewer turnovers. 
A)  load funds outperform no-load funds. 
B)  larger funds beat smaller funds. 
C)  they have done slightly better than the market after netting out transaction costs. 
D)  individual funds cannot consistently outperform the market. 
E)  funds with more turnovers outperform those having fewer turnovers.

Question 18

An investment company that issues shares to anyone wishing to buy and redeems shares from anyone wishing to sell is called a(n) ___________ fund.

Accepted Answer

A)  market 
B)  open-end 
C)  stock mutual 
D)  closed-end 
E)  exchange 
A)  market 
B)  open-end 
C)  stock mutual 
D)  closed-end 
E)  exchange

Question 19

You invest $30,000 in a money market mutual fund at the beginning of the year. If the fund assets appreciate at 4.8 percent, how many shares do you have at the end of the year?

Accepted Answer

A)  3,000 
B)  3,280 
C)  3,162 
D)  3,144 
E)  3,221 
A)  3,000 
B)  3,280 
C)  3,162 
D)  3,144 
E)  3,221

Question 20

A ___________ is a charge applied when mutual fund shares are redeemed.

Accepted Answer

A)  management fee 
B)  special fee 
C)  back-end 
D)  front-end 
E)  switch fee 
A)  management fee 
B)  special fee 
C)  back-end 
D)  front-end 
E)  switch fee

A(n) ___________ fund issues a fixed number of shares that are bought and sold in the open secondary market. The fund capitalization is fixed unless a new public offering is made.

A closed-end mutual fund has $300 million in assets and sells for a 10.5 percent discount to NAV. If the NAV is $10.28, what price are the fund shares?

Mutual fund turnover is measured as:

___________ are asset-holding units of companies using their expertise to generate income for investors.

ABC Fund has an offer price of $21.60 and a front-end load of 2%. What is its net asset value per share?

To avoid taxation, tax-managed fund manager must:

Which of the following mutual funds might try to time the market to achieve superior performance?

The money market deposit accounts are primarily bank deposits where the funds will be protected up to $100,000 of loss by the ___________.

___________ is a measure of the trading activity of a mutual fund over a period.

An open-end fund that invests strictly in short-term, high-quality, low-risk securities is called a(n) ___________ mutual fund.

A hedge fund may charge a special performance fee that is frequently equal to:

How the price of the shares is determined for a closed-end investment company?

A mutual fund has a NAV of $46.20 at the beginning of the year. The fund distributes a dividend of $0.32 and a capital gain of $0.87 at the end of the year. If you purchased 2,000 shares at the beginning of the year and the end of year NAV was $49.10, what was your return for the year?

A mutual fund is owned by:

An income trust has a return of 6.2 percent and it is able to redistribute the income to the unit-holders. If you are in the 32 percent tax rate, what is the equivalent after tax yield?

A fund's turnover is a measure of the fund's ___________ during a year.

Empirical researches on investment companies indicate that:

An investment company that issues shares to anyone wishing to buy and redeems shares from anyone wishing to sell is called a(n) ___________ fund.

You invest $30,000 in a money market mutual fund at the beginning of the year. If the fund assets appreciate at 4.8 percent, how many shares do you have at the end of the year?

A ___________ is a charge applied when mutual fund shares are redeemed.

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Overview of Security Types

The Stock Market

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

Filters

Exam 5: Mutual Funds

A(n) ___________ fund issues a fixed number of shares that are bought and sold in the open secondary market. The fund capitalization is fixed unless a new public offering is made.

A closed-end mutual fund has $300 million in assets and sells for a 10.5 percent discount to NAV. If the NAV is $10.28, what price are the fund shares?

Mutual fund turnover is measured as:

___________ are asset-holding units of companies using their expertise to generate income for investors.

ABC Fund has an offer price of $21.60 and a front-end load of 2%. What is its net asset value per share?

To avoid taxation, tax-managed fund manager must:

Which of the following mutual funds might try to time the market to achieve superior performance?

The money market deposit accounts are primarily bank deposits where the funds will be protected up to $100,000 of loss by the ___________.

___________ is a measure of the trading activity of a mutual fund over a period.

An open-end fund that invests strictly in short-term, high-quality, low-risk securities is called a(n) ___________ mutual fund.

A hedge fund may charge a special performance fee that is frequently equal to:

How the price of the shares is determined for a closed-end investment company?

A mutual fund has a NAV of $46.20 at the beginning of the year. The fund distributes a dividend of $0.32 and a capital gain of $0.87 at the end of the year. If you purchased 2,000 shares at the beginning of the year and the end of year NAV was $49.10, what was your return for the year?

A mutual fund is owned by:

An income trust has a return of 6.2 percent and it is able to redistribute the income to the unit-holders. If you are in the 32 percent tax rate, what is the equivalent after tax yield?

A fund's turnover is a measure of the fund's ___________ during a year.

Empirical researches on investment companies indicate that:

An investment company that issues shares to anyone wishing to buy and redeems shares from anyone wishing to sell is called a(n) ___________ fund.

You invest $30,000 in a money market mutual fund at the beginning of the year. If the fund assets appreciate at 4.8 percent, how many shares do you have at the end of the year?

A ___________ is a charge applied when mutual fund shares are redeemed.

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Overview of Security Types

The Stock Market

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

Filters