Exam 13: Investing in Mutual Funds

RACE Mutual fund is a no-load fund that had a net asset value one year ago of $25.60.Today the NAV is $28.83.During the year dividends of $0.72 were paid out and a capital gains distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work. )

Growth-and-Income funds invest most of their capital in common stocks.

A fund's objective must be stated in its prospectus.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -You could discover the actual fees charged by your mutual fund in the [daily Wall Street Journal | fund prospectus].

All no load funds charge an upfront fee to purchase shares of a mutual fund.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -A fund that invests both in foreign and U.S.Securities would be known as [an international | a global] fund.

In the Wall Street Journal's listing of mutual funds,a "t" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

The most important advantage of a mutual fund is pooled diversification.

A mutual fund's NAV is its

Investment company earnings result solely from dividends.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Individuals would not trade among themselves in [a closed end | an open end] investment company.

By definition,all ETF are no-load funds.

It is almost impossible to lose money in a mutual fund as the result of fraud or the mutual fund company's bankruptcy.

The major advantage of mutual funds to the small investor is

A 12(b)-1 fee can only be charged by a load mutual fund.

A mutual fund always provides active professional investment management.

No-load funds are generally sold directly to the investor without a salesperson.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -A no-load mutual fund would most likely be sold by [a broker | calling the mutual fund company].

Investors select and purchase securities held within mutual funds.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -"N.L." in a mutual fund quote means [no-load | net load].