Question 1

A mutual fund's net asset value (NAV)reflects

Accepted Answer

A) the market value of all its holdings. 
B) the amount distributed to shareholders each year. 
C) its revenues minus its expenses. 
D) its per-share value in a bankruptcy liquidation. 
A) the market value of all its holdings. 
B) the amount distributed to shareholders each year. 
C) its revenues minus its expenses. 
D) its per-share value in a bankruptcy liquidation.

Question 2

A variable ratio plan adjusts a portfolio's weights by investing more heavily in the asset that has performed poorly in the recent past.

Accepted Answer

A) True 
 B)False

Question 3

An investment vehicle that shifts asset weights over time is

Accepted Answer

A) an asset allocation fund. 
B) a market timing limited partnership. 
C) cyclical stock. 
D) a return-indexed insurance policy. 
A) an asset allocation fund. 
B) a market timing limited partnership. 
C) cyclical stock. 
D) a return-indexed insurance policy.

Question 4

The following returns were earned last year: Fund A,10%,Fund B,24%,the overall market,14%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was the overall market.

Accepted Answer

A) True 
 B)False

Question 5

The Ajax Fund,which trades on the New York Stock Exchange,was quoted with a NAV of $10 and an offer price of $10.50.Thus,we know the fund is

Accepted Answer

A) open end with a load. 
B) closed end with a load. 
C) closed end with no load. 
D) open end with no load. 
A) open end with a load. 
B) closed end with a load. 
C) closed end with no load. 
D) open end with no load.

Question 6

A closed-end fund has a

Accepted Answer

A) fixed number of shares. 
B) fixed number of investors. 
C) front-end load. 
D) back-end load. 
A) fixed number of shares. 
B) fixed number of investors. 
C) front-end load. 
D) back-end load.

Question 7

One of the biggest mistakes investors frequently make in managing their 401(k)retirement investments is being excessively conservative.

Accepted Answer

A) True 
 B)False

Question 8

A mutual fund with a portfolio turnover of 100% is changing its complete portfolio during a period.

Accepted Answer

A) True 
 B)False

Question 9

The Jerry Fund,which trades on the New York Stock Exchange,has a NAV of $20 and a market price of $22.We know,then,the fund is

Accepted Answer

A) open end with a front-end load. 
B) open end with a rear-end load. 
C) closed end,selling at a discount. 
D) closed end,selling at a premium. 
A) open end with a front-end load. 
B) open end with a rear-end load. 
C) closed end,selling at a discount. 
D) closed end,selling at a premium.

Question 10

Exchange-traded funds are less tax efficient than many other mutual funds.

Accepted Answer

A) True 
 B)False

Question 11

The Redux Fund has issued 500,000 shares to its investors,and it holds 100,000 shares of various companies worth $3 million.Therefore,the fund's NAV is $30 a share.

Accepted Answer

A) True 
 B)False

Question 12

Which of the below publications does not provide periodic evaluations of mutual funds?

Accepted Answer

A) Time 
B) Barron's 
C) Forbes 
D) Money 
A) Time 
B) Barron's 
C) Forbes 
D) Money

Question 13

A discount on a closed-end fund can increase its investment return.

Accepted Answer

A) True 
 B)False

Question 14

A "HOLDR" is an example of a market segment exchange-traded fund.

Accepted Answer

A) True 
 B)False

Question 15

The Gale Market Index Fund advertises that it earned a 392% return.This is probably its

Accepted Answer

A) cumulative total return over some number of years. 
B) average annual total return over some number of years. 
C) total return for the previous year. 
D) return in relation to the overall market. 
A) cumulative total return over some number of years. 
B) average annual total return over some number of years. 
C) total return for the previous year. 
D) return in relation to the overall market.

Question 16

The more narrowly-defined a mutual fund's objective,the greater its risk,all other things considered.

Accepted Answer

A) True 
 B)False

Question 17

Generally,unless an employer provides 100% funding for a 401(k)plan,it is a good idea to reject participating in the plan.

Accepted Answer

A) True 
 B)False

Question 18

Which type of mutual fund can be purchased at a premium or discount?

Accepted Answer

A) Load fund 
B) No-load fund 
C) Open-end fund 
D) Closed-end fund 
A) Load fund 
B) No-load fund 
C) Open-end fund 
D) Closed-end fund

Question 19

The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,11%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was Fund A.

Accepted Answer

A) True 
 B)False

Question 20

Which service below is usually not provided by a mutual fund?

Accepted Answer

A) Fund switching within a family of funds 
B) Transactions by telephone 
C) Reinvestment plans 
D) Insurance to protect against market losses 
A) Fund switching within a family of funds 
B) Transactions by telephone 
C) Reinvestment plans 
D) Insurance to protect against market losses

A mutual fund's net asset value (NAV)reflects

A variable ratio plan adjusts a portfolio's weights by investing more heavily in the asset that has performed poorly in the recent past.

An investment vehicle that shifts asset weights over time is

The following returns were earned last year: Fund A,10%,Fund B,24%,the overall market,14%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was the overall market.

The Ajax Fund,which trades on the New York Stock Exchange,was quoted with a NAV of $10 and an offer price of $10.50.Thus,we know the fund is

A closed-end fund has a

One of the biggest mistakes investors frequently make in managing their 401(k)retirement investments is being excessively conservative.

A mutual fund with a portfolio turnover of 100% is changing its complete portfolio during a period.

The Jerry Fund,which trades on the New York Stock Exchange,has a NAV of $20 and a market price of $22.We know,then,the fund is

Exchange-traded funds are less tax efficient than many other mutual funds.

The Redux Fund has issued 500,000 shares to its investors,and it holds 100,000 shares of various companies worth $3 million.Therefore,the fund's NAV is $30 a share.

Which of the below publications does not provide periodic evaluations of mutual funds?

A discount on a closed-end fund can increase its investment return.

A "HOLDR" is an example of a market segment exchange-traded fund.

The Gale Market Index Fund advertises that it earned a 392% return.This is probably its

The more narrowly-defined a mutual fund's objective,the greater its risk,all other things considered.

Generally,unless an employer provides 100% funding for a 401(k)plan,it is a good idea to reject participating in the plan.

Which type of mutual fund can be purchased at a premium or discount?

The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,11%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was Fund A.

Which service below is usually not provided by a mutual fund?

Financial Planning: Why Its Important to You

The Time Value of Money: All Dollars Are Not Created Equal

Financial Statement and Budgets: Where Are You Now and Where Are You Going

Taxes: the Governments Share of Your Rewards

Liquidity Management: Managing Current Assets and Current Liabilities

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

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Exam 12: Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

A mutual fund's net asset value (NAV)reflects

A variable ratio plan adjusts a portfolio's weights by investing more heavily in the asset that has performed poorly in the recent past.

An investment vehicle that shifts asset weights over time is

The following returns were earned last year: Fund A,10%,Fund B,24%,the overall market,14%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was the overall market.

The Ajax Fund,which trades on the New York Stock Exchange,was quoted with a NAV of $10 and an offer price of $10.50.Thus,we know the fund is

A closed-end fund has a

One of the biggest mistakes investors frequently make in managing their 401(k)retirement investments is being excessively conservative.

A mutual fund with a portfolio turnover of 100% is changing its complete portfolio during a period.

The Jerry Fund,which trades on the New York Stock Exchange,has a NAV of $20 and a market price of $22.We know,then,the fund is

Exchange-traded funds are less tax efficient than many other mutual funds.

The Redux Fund has issued 500,000 shares to its investors,and it holds 100,000 shares of various companies worth $3 million.Therefore,the fund's NAV is $30 a share.

Which of the below publications does not provide periodic evaluations of mutual funds?

A discount on a closed-end fund can increase its investment return.

A "HOLDR" is an example of a market segment exchange-traded fund.

The Gale Market Index Fund advertises that it earned a 392% return.This is probably its

The more narrowly-defined a mutual fund's objective,the greater its risk,all other things considered.

Generally,unless an employer provides 100% funding for a 401(k)plan,it is a good idea to reject participating in the plan.

Which type of mutual fund can be purchased at a premium or discount?

The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,11%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was Fund A.

Which service below is usually not provided by a mutual fund?

Financial Planning: Why Its Important to You

The Time Value of Money: All Dollars Are Not Created Equal

Financial Statement and Budgets: Where Are You Now and Where Are You Going

Taxes: the Governments Share of Your Rewards

Liquidity Management: Managing Current Assets and Current Liabilities

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

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