Question 1

Which of the following is not a characteristic of money market mutual funds?

Accepted Answer

A) No minimum on withdrawals 
B) Shares values at $1 
C) Check writing privileges 
D) Daily interest 
A) No minimum on withdrawals 
B) Shares values at $1 
C) Check writing privileges 
D) Daily interest

Question 2

An investment vehicle that adjusts asset weights over time is an asset allocation mutual fund.

Accepted Answer

A) True 
 B)False

Question 3

A unit investment trust is similar to a mutual fund,except shares are bought in units and the trust is more aggressively managed.

Accepted Answer

A) True 
 B)False

Question 4

You always sell shares of a no-load,open-end fund at their net asset values.

Accepted Answer

A) True 
 B)False

Question 5

In relation to no-load funds,load funds show

Accepted Answer

A) significantly better performance. 
B) significantly poorer performance. 
C) about the same performance. 
D) poorer performance but lower operating costs. 
A) significantly better performance. 
B) significantly poorer performance. 
C) about the same performance. 
D) poorer performance but lower operating costs.

Question 6

The Mark IV Fund had a rate of return of 21% last year.If its beta weight was +0.6 and if the return on the overall market was 12%,its risk adjusted rate of return,RAROR,is

Accepted Answer

A) +19.5%. 
B) - 3.0%. 
C) +23.0%. 
D) + 2.0%. 
A) +19.5%. 
B) - 3.0%. 
C) +23.0%. 
D) + 2.0%.

Question 7

If you are seeking moderate growth and moderate current return,you should select

Accepted Answer

A) a money market fund. 
B) an income fund. 
C) a balanced fund. 
D) a mixed fund. 
A) a money market fund. 
B) an income fund. 
C) a balanced fund. 
D) a mixed fund.

Question 8

Investment clubs are formed by brokerage firms who then manage the club's portfolio.

Accepted Answer

A) True 
 B)False

Question 9

The difference between a load fund and a no-load fund is that

Accepted Answer

A) load funds invest in a variety of securities while no-load funds limit their investments to common stocks. 
B) load funds borrow money to increase their portfolio,while no-load funds do not. 
C) you buy no-load funds at their net asset values,but you pay more than net asset value when you buy load funds. 
D) no-load funds can be purchased anywhere,but load funds must be purchased through a stockbroker. 
A) load funds invest in a variety of securities while no-load funds limit their investments to common stocks. 
B) load funds borrow money to increase their portfolio,while no-load funds do not. 
C) you buy no-load funds at their net asset values,but you pay more than net asset value when you buy load funds. 
D) no-load funds can be purchased anywhere,but load funds must be purchased through a stockbroker.

Question 10

A redemption charge is a

Accepted Answer

A) back-end load. 
B) font-end load. 
C) management fee. 
D) carrying fee. 
A) back-end load. 
B) font-end load. 
C) management fee. 
D) carrying fee.

Question 11

Money market mutual funds have the protection of FDIC insurance.

Accepted Answer

A) True 
 B)False

Question 12

A sector fund invests in only one industry.

Accepted Answer

A) True 
 B)False

Question 13

A disadvantage of mutual funds is that they cannot be used in IRAs.

Accepted Answer

A) True 
 B)False

Question 14

Which item below is not a characteristic of an exchange-traded fund?

Accepted Answer

A) Investors can use margin to buy them. 
B) Their portfolios are changed frequently in response to market conditions. 
C) They have very low expense ratios. 
D) They may be more tax efficient than other types of funds. 
A) Investors can use margin to buy them. 
B) Their portfolios are changed frequently in response to market conditions. 
C) They have very low expense ratios. 
D) They may be more tax efficient than other types of funds.

Question 15

The Druid Fund has a NAV of $9.00 and an offer price of $9.45.We know,then,that

Accepted Answer

A) Druid is a load fund. 
B) Druid is about to be issued to the public as a no-load fund with a $0.45 offer cost. 
C) shares can be purchased only through a stockbroker. 
D) there is a $0.45 premium paid to investors to buy the shares. 
A) Druid is a load fund. 
B) Druid is about to be issued to the public as a no-load fund with a $0.45 offer cost. 
C) shares can be purchased only through a stockbroker. 
D) there is a $0.45 premium paid to investors to buy the shares.

Question 16

Coordinating investments in a 401(k)plan with investments outside the plan usually

Accepted Answer

A) involves selecting high current-return assets in plan with growth assets outside. 
B) involves selecting growth assets in plan with high current return assets outside. 
C) dictates the same proportion of growth assets to high-income assets,both in and out of plan. 
D) means having sufficient liquidity both in and out of plan. 
A) involves selecting high current-return assets in plan with growth assets outside. 
B) involves selecting growth assets in plan with high current return assets outside. 
C) dictates the same proportion of growth assets to high-income assets,both in and out of plan. 
D) means having sufficient liquidity both in and out of plan.

Question 17

If your investment goal is merely to match the overall market,you should invest in an index fund.

Accepted Answer

A) True 
 B)False

Question 18

The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,14%.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 19

A load fund differs from a no-load fund in that the load fund often borrows to buy securities while a no-load does not.

Accepted Answer

A) True 
 B)False

Question 20

Evaluating the performance of a mutual fund involves which of the following activities?
I.Determining its rate of return
II.Calculating its net asset value
III.Examining its turnover ratio
IV.Examining its administrative expenses

Accepted Answer

A) I and II 
B) I,III,and IV 
C) II,III,and IV 
D) All four 
A) I and II 
B) I,III,and IV 
C) II,III,and IV 
D) All four

Which of the following is not a characteristic of money market mutual funds?

An investment vehicle that adjusts asset weights over time is an asset allocation mutual fund.

A unit investment trust is similar to a mutual fund,except shares are bought in units and the trust is more aggressively managed.

You always sell shares of a no-load,open-end fund at their net asset values.

In relation to no-load funds,load funds show

The Mark IV Fund had a rate of return of 21% last year.If its beta weight was +0.6 and if the return on the overall market was 12%,its risk adjusted rate of return,RAROR,is

If you are seeking moderate growth and moderate current return,you should select

Investment clubs are formed by brokerage firms who then manage the club's portfolio.

The difference between a load fund and a no-load fund is that

A redemption charge is a

Money market mutual funds have the protection of FDIC insurance.

A sector fund invests in only one industry.

A disadvantage of mutual funds is that they cannot be used in IRAs.

Which item below is not a characteristic of an exchange-traded fund?

The Druid Fund has a NAV of $9.00 and an offer price of $9.45.We know,then,that

Coordinating investments in a 401(k)plan with investments outside the plan usually

If your investment goal is merely to match the overall market,you should invest in an index fund.

The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,14%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was Fund A.

A load fund differs from a no-load fund in that the load fund often borrows to buy securities while a no-load does not.

Evaluating the performance of a mutual fund involves which of the following activities? I.Determining its rate of return II.Calculating its net asset value III.Examining its turnover ratio IV.Examining its administrative expenses

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

Which of the following is not a characteristic of money market mutual funds?

An investment vehicle that adjusts asset weights over time is an asset allocation mutual fund.

A unit investment trust is similar to a mutual fund,except shares are bought in units and the trust is more aggressively managed.

You always sell shares of a no-load,open-end fund at their net asset values.

In relation to no-load funds,load funds show

The Mark IV Fund had a rate of return of 21% last year.If its beta weight was +0.6 and if the return on the overall market was 12%,its risk adjusted rate of return,RAROR,is

If you are seeking moderate growth and moderate current return,you should select

Investment clubs are formed by brokerage firms who then manage the club's portfolio.

The difference between a load fund and a no-load fund is that

A redemption charge is a

Money market mutual funds have the protection of FDIC insurance.

A sector fund invests in only one industry.

A disadvantage of mutual funds is that they cannot be used in IRAs.

Which item below is not a characteristic of an exchange-traded fund?

The Druid Fund has a NAV of $9.00 and an offer price of $9.45.We know,then,that

Coordinating investments in a 401(k)plan with investments outside the plan usually

If your investment goal is merely to match the overall market,you should invest in an index fund.

The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,14%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was Fund A.

A load fund differs from a no-load fund in that the load fund often borrows to buy securities while a no-load does not.

Evaluating the performance of a mutual fund involves which of the following activities? I.Determining its rate of return II.Calculating its net asset value III.Examining its turnover ratio IV.Examining its administrative expenses

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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