Question 1

One disadvantage of mutual fund investments is that they are illiquid.

Accepted Answer

A) True 
 B)False

Question 2

Back-end load mutual funds charge a commission when the investor sells the mutual fund.

Accepted Answer

A) True 
 B)False

Question 3

What does the following mathematical expression yield? (total market value of all securities - liabilities)divided by (total shares outstanding)=

Accepted Answer

A) asset value. 
B) net value. 
C) net asset value. 
D) net return value. 
E) asset return value. 
A) asset value. 
B) net value. 
C) net asset value. 
D) net return value. 
E) asset return value.

Question 4

An aggressive growth fund is an appropriate choice for an investor looking for capital gains.

Accepted Answer

A) True 
 B)False

Question 5

The ________ is the value of the mutual fund's holdings,minus any debt,divided by the number of shares outstanding.

Accepted Answer

A) net worth 
B) market value 
C) tangible value 
D) net asset value 
E) none of the above 
A) net worth 
B) market value 
C) tangible value 
D) net asset value 
E) none of the above

Question 6

What provides a measure of the level of a mutual fund's trading activity?

Accepted Answer

A) Trading ratio 
B) Expense ratio 
C) Exchange ratio 
D) Turnover ratio 
A) Trading ratio 
B) Expense ratio 
C) Exchange ratio 
D) Turnover ratio

Question 7

When you own shares of a mutual fund,you can choose to have the dividend and capital gains distributions paid directly to you in the form of cash or you can choose to have them reinvested into additional shares of the fund itself.

Accepted Answer

A) True 
 B)False

Question 8

Sixty-five percent of Sally's mutual funds are invested in environmentally friendly companies.We can assume Sally has invested in sector funds.

Accepted Answer

A) True 
 B)False

Question 9

A mutual fund's holdings are determined to be $1,500,000,000 with $250,000,000 in liabilities and 100,000,000 shares outstanding.What is the funds' NAV?

Accepted Answer

A) $125.00 
B) $15.00 
C) $12.50 
D) $150.00 
A) $125.00 
B) $15.00 
C) $12.50 
D) $150.00

Question 10

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Accepted Answer

A) True 
 B)False

Question 11

Hedge fund managers charge very high fees,generally taking ________ of the assets under management (even when the fund loses money)along with ________ of the profits-and some take even more.

Accepted Answer

A) 1 percent;10 percent 
B) 2 percent;20 percent 
C) 2 percent;10 percent 
D) 5 percent;25 percent 
A) 1 percent;10 percent 
B) 2 percent;20 percent 
C) 2 percent;10 percent 
D) 5 percent;25 percent

Question 12

Mutual funds charge high sales loads because their potential returns are much higher than the returns for individual stocks.

Accepted Answer

A) True 
 B)False

Question 13

When selecting a mutual fund,since past performance doesn't necessarily predict future results,you don't need to look at the fund's past performance.

Accepted Answer

A) True 
 B)False

Question 14

Prepare a case for investing in a bond fund versus individual bonds.

Accepted Answer

A bond mutual fund suits the small inves

Question 15

Explain what the three 'classes' of a mutual fund shares are all about.

Accepted Answer

There is actually only one mutual fund b

Question 16

For an investor with some speculative money to invest,which fund would be an appropriate choice for potentially large returns?

Accepted Answer

A) Junk bond fund 
B) Aggressive growth fund 
C) High technology sector fund 
D) All of the above are correct. 
E) Only A and C are correct. 
A) Junk bond fund 
B) Aggressive growth fund 
C) High technology sector fund 
D) All of the above are correct. 
E) Only A and C are correct.

Question 17

Do the advantages of investing in a Mutual Fund outweigh the disadvantages for the average small investor?

Accepted Answer

A case can be made that the advantages t

Question 18

You purchased 100 shares of a fund for $15.50 per share.Its current NAV is 20.75 per share.There were no distributions.What is your total return?

Accepted Answer

A) 33.87% 
B) 22.33% 
C) 79.67% 
D) 25.51% 
A) 33.87% 
B) 22.33% 
C) 79.67% 
D) 25.51%

Question 19

One of the advantages of municipal bond funds is that

Accepted Answer

A) they may be exempt from state taxes. 
B) the interest is generally exempt from federal taxes. 
C) they are all no-load funds. 
D) both A and B are correct. 
A) they may be exempt from state taxes. 
B) the interest is generally exempt from federal taxes. 
C) they are all no-load funds. 
D) both A and B are correct.

Question 20

Roberta Cartwright puts money each month into a mutual fund that has very few controls;in that,the managers can invest in whatever they want because this type of fund is not regulated by the SEC.Roberta has a(n)________ fund.

Accepted Answer

A) open-end 
B) closed-end 
C) hedge 
D) no-load 
E) back-end load 
A) open-end 
B) closed-end 
C) hedge 
D) no-load 
E) back-end load

One disadvantage of mutual fund investments is that they are illiquid.

Back-end load mutual funds charge a commission when the investor sells the mutual fund.

What does the following mathematical expression yield? (total market value of all securities - liabilities)divided by (total shares outstanding)=

An aggressive growth fund is an appropriate choice for an investor looking for capital gains.

The ________ is the value of the mutual fund's holdings,minus any debt,divided by the number of shares outstanding.

What provides a measure of the level of a mutual fund's trading activity?

When you own shares of a mutual fund,you can choose to have the dividend and capital gains distributions paid directly to you in the form of cash or you can choose to have them reinvested into additional shares of the fund itself.

Sixty-five percent of Sally's mutual funds are invested in environmentally friendly companies.We can assume Sally has invested in sector funds.

A mutual fund's holdings are determined to be $1,500,000,000 with $250,000,000 in liabilities and 100,000,000 shares outstanding.What is the funds' NAV?

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Hedge fund managers charge very high fees,generally taking of the assets under management (even when the fund loses money)along with of the profits-and some take even more.

Mutual funds charge high sales loads because their potential returns are much higher than the returns for individual stocks.

When selecting a mutual fund,since past performance doesn't necessarily predict future results,you don't need to look at the fund's past performance.

Prepare a case for investing in a bond fund versus individual bonds.

Explain what the three 'classes' of a mutual fund shares are all about.

For an investor with some speculative money to invest,which fund would be an appropriate choice for potentially large returns?

Do the advantages of investing in a Mutual Fund outweigh the disadvantages for the average small investor?

You purchased 100 shares of a fund for $15.50 per share.Its current NAV is 20.75 per share.There were no distributions.What is your total return?

One of the advantages of municipal bond funds is that

Roberta Cartwright puts money each month into a mutual fund that has very few controls;in that,the managers can invest in whatever they want because this type of fund is not regulated by the SEC.Roberta has a(n)________ fund.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 14: Mutual Funds: an Easy Way to Diversify

One disadvantage of mutual fund investments is that they are illiquid.

Back-end load mutual funds charge a commission when the investor sells the mutual fund.

What does the following mathematical expression yield? (total market value of all securities - liabilities)divided by (total shares outstanding)=

An aggressive growth fund is an appropriate choice for an investor looking for capital gains.

The ________ is the value of the mutual fund's holdings,minus any debt,divided by the number of shares outstanding.

What provides a measure of the level of a mutual fund's trading activity?

When you own shares of a mutual fund,you can choose to have the dividend and capital gains distributions paid directly to you in the form of cash or you can choose to have them reinvested into additional shares of the fund itself.

Sixty-five percent of Sally's mutual funds are invested in environmentally friendly companies.We can assume Sally has invested in sector funds.

A mutual fund's holdings are determined to be $1,500,000,000 with $250,000,000 in liabilities and 100,000,000 shares outstanding.What is the funds' NAV?

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Hedge fund managers charge very high fees,generally taking ________ of the assets under management (even when the fund loses money)along with ________ of the profits-and some take even more.

Mutual funds charge high sales loads because their potential returns are much higher than the returns for individual stocks.

When selecting a mutual fund,since past performance doesn't necessarily predict future results,you don't need to look at the fund's past performance.

Prepare a case for investing in a bond fund versus individual bonds.

Explain what the three 'classes' of a mutual fund shares are all about.

For an investor with some speculative money to invest,which fund would be an appropriate choice for potentially large returns?

Do the advantages of investing in a Mutual Fund outweigh the disadvantages for the average small investor?

You purchased 100 shares of a fund for $15.50 per share.Its current NAV is 20.75 per share.There were no distributions.What is your total return?

One of the advantages of municipal bond funds is that

Roberta Cartwright puts money each month into a mutual fund that has very few controls;in that,the managers can invest in whatever they want because this type of fund is not regulated by the SEC.Roberta has a(n)________ fund.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Hedge fund managers charge very high fees,generally taking of the assets under management (even when the fund loses money)along with of the profits-and some take even more.