Question 1

Which of the following is not true of index funds?

Accepted Answer

A)  Sometimes they are called "passive" funds.
B)  They do have managers that simply buy the securities in the index.
C)  They are a low-cost alternative to managed mutual funds.
D)  The S&P 500 index outperforms the majority of funds over many years.
E)  The typical expense ratio for index funds is 0.50 percent or more.F) C) and D)
G) A) and B)

Question 2

Norma Rose is buying shares in a mutual fund that invests in foreign stocks sold in securities markets throughout the world,excluding the United States.What type of mutual fund is she buying?

Accepted Answer

A)  Aggressive growth fund
B)  Equity income fund
C)  Global stock fund
D)  International fund
E)  Regional fundF) A) and E)
G) None of the above

Question 3

A mutual fund that invests in companies expecting higher-than-average revenue and earnings growth is called a(n) ________ fund.

Accepted Answer

A)  balanced
B)  growth
C)  industry
D)  income
E)  money marketF) B) and D)
G) C) and E)

Question 4

If the dollar amount of total return on your mutual fund is $165 and the original cost of your investment is $1,200,then what is your percentage of total return?

Accepted Answer

A)  6.88 percent
B)  7.25 percent
C)  12.00 percent
D)  13.75 percent
E)  16.50 percentF) A) and B)
G) A) and C)

Question 5

An investment company sponsoring a mutual fund must give existing shareholders a prospectus.

Accepted Answer

A) True 
 B)False

Question 6

A closed-end fund is:

Accepted Answer

A)  a fund that generally invests only in the stocks or other securities contained in a specific stock or securities index.
B)  has only a certain number of shares available to investors when the fund is organized.
C)  professionally managed so investors need not monitor the performance of the fund.
D)  a fund whose shares are issued and redeemed by the investment company at the request of investors.
E)  one whose shares trade only at end-of-the-day prices.F) C) and D)
G) A) and B)

Question 7

A mutual fund that requires investors to make regular purchases over a specified period of time is called a:

Accepted Answer

A)  regular account.
B)  voluntary savings plan.
C)  contractual savings plan.
D)  minimum withdrawal plan.
E)  free contract plan.F) None of the above
G) A) and B)

Question 8

Which one of the following is not a withdrawal option for a mutual fund owner,who has a minimum NAV of $5,000?

Accepted Answer

A)  Withdrawing a specified,fixed dollar amount each investment period
B)  Liquidating,or "selling off" a certain number of shares each investment period
C)  Withdrawing a fixed percentage of asset growth
D)  Withdrawing all asset growth earned during an investment period
E)  Withdrawing a stated amount and treating it as a short-term loanF) D) and E)
G) All of the above

Question 9

Explain the difference between a load fund and a no-load fund.From a performance standpoint,is there a significant difference between mutual funds that charge commissions and those that do not?

Accepted Answer

A load fund is a mutual fund in which in...

Question 10

Investors 72 years or older are less likely to invest in mutual funds than any other age group.

Accepted Answer

A) True 
 B)False

Question 11

A fee that some investment companies charge for distributing and marketing a mutual fund is called a:

Accepted Answer

A)  14A-1 fee.
B)  12b-1 fee.
C)  18-2 fee.
D)  403 fee.
E)  401 fee.F) B) and E)
G) B) and D)

Exam 16: Investing in Mutual Funds

Norma Rose is buying shares in a mutual fund that invests in foreign stocks sold in securities markets throughout the world,excluding the United States.What type of mutual fund is she buying?

Correct Answer
verified

Explain the difference between a load fund and a no-load fund.From a performance standpoint,is there a significant difference between mutual funds that charge commissions and those that do not?

Correct Answer
verified
A load fund is a mutual fund in which in...
View Answer

Which one of the following is not a withdrawal option for a mutual fund owner,who has a minimum NAV of $5,000?

Correct Answer
verified

A mutual fund that invests in companies expecting higher-than-average revenue and earnings growth is called a(n) ________ fund.

Correct Answer
verified

A closed-end fund is:

Correct Answer
verified

Which of the following is not true of index funds?

Correct Answer
verified

A fee that some investment companies charge for distributing and marketing a mutual fund is called a:

Correct Answer
verified

If the dollar amount of total return on your mutual fund is $165 and the original cost of your investment is $1,200,then what is your percentage of total return?

Correct Answer
verified

Investors 72 years or older are less likely to invest in mutual funds than any other age group.

Correct Answer
verified

An investment company sponsoring a mutual fund must give existing shareholders a prospectus.

Correct Answer
verified

A mutual fund that requires investors to make regular purchases over a specified period of time is called a:

Correct Answer
verified

Exam 16: Investing in Mutual Funds

Norma Rose is buying shares in a mutual fund that invests in foreign stocks sold in securities markets throughout the world,excluding the United States.What type of mutual fund is she buying?

Correct AnswerverifiedShow Answer

Explain the difference between a load fund and a no-load fund.From a performance standpoint,is there a significant difference between mutual funds that charge commissions and those that do not?

Correct AnswerverifiedA load fund is a mutual fund in which in...View AnswerShow Answer

Which one of the following is not a withdrawal option for a mutual fund owner,who has a minimum NAV of $5,000?

Correct AnswerverifiedShow Answer

A mutual fund that invests in companies expecting higher-than-average revenue and earnings growth is called a(n) ________ fund.

Correct AnswerverifiedShow Answer

A closed-end fund is:

Correct AnswerverifiedShow Answer

Which of the following is not true of index funds?

Correct AnswerverifiedShow Answer

A fee that some investment companies charge for distributing and marketing a mutual fund is called a:

Correct AnswerverifiedShow Answer

If the dollar amount of total return on your mutual fund is $165 and the original cost of your investment is $1,200,then what is your percentage of total return?

Correct AnswerverifiedShow Answer

Investors 72 years or older are less likely to invest in mutual funds than any other age group.

Correct AnswerverifiedShow Answer

An investment company sponsoring a mutual fund must give existing shareholders a prospectus.

Correct AnswerverifiedShow Answer

A mutual fund that requires investors to make regular purchases over a specified period of time is called a:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A load fund is a mutual fund in which in...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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