Exam 12: Mutual Funds

Mutual funds can be purchased directly from mutual fund companies,financial planners,financial advisers,full service brokerages houses,discount brokerage houses,insurance companies,and banks.

There are two kinds of prospectuses: (1)the statutory prospectus and (2)the summary prospectus; however,the summary version does not include information on the fund's investment objectives,its strategies for achieving the objectives,the principal risks of investing in the fund,the fund's fees and expenses,and its past performance.

Which is unlikely to be included in mutual fund fees?

Mutual funds can be fully invested in federal bonds,municipal bonds,gold,silver,stocks,bonds,or a variety of stocks,bonds,and other investments.

A _________________ mutual fund is a fund in which the companies market their funds online (no sales force or financial planners)and do not charge a fee.

What is the difference between dollar cost averaging and continuous automatic investing?

If you were to invest all of your money in a single company and it went bankrupt,you would not lose everything.

Mutual funds are valued at their _________________,which is the total value of all the assets minus costs divided by the number of shares outstanding.

No-load funds often outperform load funds--especially when you consider that 100% of the investment is working for you.

How is a mutual fund's expense ratio calculated?

A front-end load is the fee charged when you sell a mutual fund,which could include the commission of the financial planner or selling agent who sold you the funds.

Which factors are considered in calculating a mutual fund's expense ratio?

The NAV is commonly referred to as the _________________ of the mutual fund.

The first mutual funds were _________________ mutual funds,and now the majority of mutual funds are _________________.

Since in most cases their compensation is tied to the performance of their funds,fund managers are motivated to make their funds grow.

List the characteristic of a money market fund.

The Morningstar Style Box evaluates a mutual fund based on _________________.

List three places where you can buy mutual funds and the benefits and drawbacks of each.

When you buy a mutual fund,you own _________________.

_________________ is (are)an unsecured obligation issued by a corporation to finance its short-term credit needs.