Question 1

The major reasons why investors purchase mutual funds are professional management and diversification.

Accepted Answer

A) True 
 B)False

Question 2

High-yield bond funds are sometimes referred to as junk-bond funds.

Accepted Answer

A) True 
 B)False

Question 3

An investor is planning to systematically withdraw money from his open-end fund.He arranges to receive 40 percent of the $700 asset growth from this particular investment period.The amount he will receive is:

Accepted Answer

A) $40 
B) $140 
C) $280 
D) $470 
E) $700 
A) $40 
B) $140 
C) $280 
D) $470 
E) $700

Question 4

Income dividends are the earnings a fund pays to shareholders from its dividend and interest income.

Accepted Answer

A) True 
 B)False

Question 5

Another name for a mutual fund that doesn't levy a sales charge,but does charge an ongoing higher 12b-1 fee is a class ________ fund.

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) E 
A) A 
B) B 
C) C 
D) D 
E) E

Question 6

If an investor uses a reinvestment plan to invest income dividends and capital-gain distributions:

Accepted Answer

A) then both the income dividends and capital-gain distributions are tax-exempt. 
B) only the income dividends are tax-exempt. 
C) only the capital-gain distributions are tax-exempt. 
D) both the income dividends and capital-gain distributions are currently taxable. 
E) then both the income dividends and capital-gain distributions will be tax-deferred. 
A) then both the income dividends and capital-gain distributions are tax-exempt. 
B) only the income dividends are tax-exempt. 
C) only the capital-gain distributions are tax-exempt. 
D) both the income dividends and capital-gain distributions are currently taxable. 
E) then both the income dividends and capital-gain distributions will be tax-deferred.

Question 7

Which of the following states that it is impossible to consistently beat the market without raising your risk level?

Accepted Answer

A) Professional advisory services 
B) Professional fund manager 
C) Efficient market hypothesis 
D) Investment company 
E) Mutual fund broker 
A) Professional advisory services 
B) Professional fund manager 
C) Efficient market hypothesis 
D) Investment company 
E) Mutual fund broker

Question 8

A contingent deferred sales load,which is a charge that shareholders pay when they withdraw their investment from a mutual fund,can be as low as 1 percent or as high as ________ depending on how long you own the mutual fund before making a withdrawal.

Accepted Answer

A) 3 percent 
B) 5 percent 
C) 7 percent 
D) 10 percent 
E) 15 percent 
A) 3 percent 
B) 5 percent 
C) 7 percent 
D) 10 percent 
E) 15 percent

Question 9

Which of the following is true?

Accepted Answer

A) Over 100 million individual Americans own mutual funds. 
B) Nearly forty-five percent of all U.S.households own mutual funds. 
C) There were almost 12,000 mutual funds available at the beginning of 2018. 
D) By the end of 2017,the combined value of assets held by mutual funds totaled over 22 trillion dollars. 
E) All of these statements are true. 
A) Over 100 million individual Americans own mutual funds. 
B) Nearly forty-five percent of all U.S.households own mutual funds. 
C) There were almost 12,000 mutual funds available at the beginning of 2018. 
D) By the end of 2017,the combined value of assets held by mutual funds totaled over 22 trillion dollars. 
E) All of these statements are true.

Question 10

A mutual fund that only invests in companies outside the United States is called a(n)________ fund.

Accepted Answer

A) growth-income 
B) income 
C) international 
D) industry 
E) large-cap 
A) growth-income 
B) income 
C) international 
D) industry 
E) large-cap

Question 11

Which of the following is a disadvantage associated with purchasing a mutual fund?

Accepted Answer

A) Difficulty of buying and selling shares 
B) Aggressive or unethical sales personnel 
C) Only one withdrawal option 
D) No distribution of income and capital gains 
E) Professional management 
A) Difficulty of buying and selling shares 
B) Aggressive or unethical sales personnel 
C) Only one withdrawal option 
D) No distribution of income and capital gains 
E) Professional management

Question 12

Asset allocation funds invest in various asset classes including stocks,bonds,fixed-income securities,and money market instruments.

Accepted Answer

A) True 
 B)False

Question 13

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all in the natural resources industry.What type of mutual fund is he buying?

Accepted Answer

A) Socially responsible fund 
B) Sector fund 
C) Small cap fund 
D) Index fund 
E) Growth fund 
A) Socially responsible fund 
B) Sector fund 
C) Small cap fund 
D) Index fund 
E) Growth fund

Question 14

Which one of the following publications does not provide readers with information about mutual funds and investing?

Accepted Answer

A) Bloomberg Businessweek 
B) Current Business Survey 
C) Forbes 
D) Kiplinger's Personal Finance 
E) MONEY 
A) Bloomberg Businessweek 
B) Current Business Survey 
C) Forbes 
D) Kiplinger's Personal Finance 
E) MONEY

Question 15

Which type of mutual fund invests in high-yield,high-risk corporate bonds?

Accepted Answer

A) Junk bond fund 
B) Intermediate corporate bond fund 
C) Municipal bond fund 
D) Short-term government bond fund 
E) World bond fund 
A) Junk bond fund 
B) Intermediate corporate bond fund 
C) Municipal bond fund 
D) Short-term government bond fund 
E) World bond fund

Question 16

Noelle Simon is buying shares in a mutual fund that only invests in companies located in the Latin America area.What type of mutual fund is this?

Accepted Answer

A) Aggressive growth fund 
B) Equity income fund 
C) Global stock fund 
D) International fund 
E) Regional fund 
A) Aggressive growth fund 
B) Equity income fund 
C) Global stock fund 
D) International fund 
E) Regional fund

Question 17

Which of the following statements is false?

Accepted Answer

A) The purpose of investing in a closed-end fund,exchange-traded fund or open-end mutual fund is to earn a financial return. 
B) Income dividends are the earnings that a fund pays to shareholders from its dividend and interest income. 
C) Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio. 
D) The only way to make money on a mutual fund is by selling shares at a higher price than was initially paid for them. 
E) Income dividends are taxable. 
A) The purpose of investing in a closed-end fund,exchange-traded fund or open-end mutual fund is to earn a financial return. 
B) Income dividends are the earnings that a fund pays to shareholders from its dividend and interest income. 
C) Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio. 
D) The only way to make money on a mutual fund is by selling shares at a higher price than was initially paid for them. 
E) Income dividends are taxable.

Question 18

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

Accepted Answer

Purchase Options: To purchase shares in

Question 19

A mutual fund that invests in investment-grade corporate debt with maturities between 3 and 10 years is called a(n)________ fund.

Accepted Answer

A) long-term bond 
B) growth 
C) sector 
D) income 
E) intermediate corporate bond 
A) long-term bond 
B) growth 
C) sector 
D) income 
E) intermediate corporate bond

Question 20

The New American Enterprise Mutual Fund's portfolio is valued at $60 million.The fund has liabilities of $2 million,and the investment company sponsoring the fund has issued 2,900,000 shares.What is the fund's net asset value?

Accepted Answer

A) $60 
B) $58 
C) $40 
D) $29 
E) $20 
A) $60 
B) $58 
C) $40 
D) $29 
E) $20

The major reasons why investors purchase mutual funds are professional management and diversification.

High-yield bond funds are sometimes referred to as junk-bond funds.

An investor is planning to systematically withdraw money from his open-end fund.He arranges to receive 40 percent of the $700 asset growth from this particular investment period.The amount he will receive is:

Income dividends are the earnings a fund pays to shareholders from its dividend and interest income.

Another name for a mutual fund that doesn't levy a sales charge,but does charge an ongoing higher 12b-1 fee is a class ________ fund.

If an investor uses a reinvestment plan to invest income dividends and capital-gain distributions:

Which of the following states that it is impossible to consistently beat the market without raising your risk level?

A contingent deferred sales load,which is a charge that shareholders pay when they withdraw their investment from a mutual fund,can be as low as 1 percent or as high as ________ depending on how long you own the mutual fund before making a withdrawal.

Which of the following is true?

A mutual fund that only invests in companies outside the United States is called a(n)________ fund.

Which of the following is a disadvantage associated with purchasing a mutual fund?

Asset allocation funds invest in various asset classes including stocks,bonds,fixed-income securities,and money market instruments.

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all in the natural resources industry.What type of mutual fund is he buying?

Which one of the following publications does not provide readers with information about mutual funds and investing?

Which type of mutual fund invests in high-yield,high-risk corporate bonds?

Noelle Simon is buying shares in a mutual fund that only invests in companies located in the Latin America area.What type of mutual fund is this?

Which of the following statements is false?

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

A mutual fund that invests in investment-grade corporate debt with maturities between 3 and 10 years is called a(n)________ fund.

The New American Enterprise Mutual Fund's portfolio is valued at $60 million.The fund has liabilities of $2 million,and the investment company sponsoring the fund has issued 2,900,000 shares.What is the fund's net asset value?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 16: Investing in Mutual Funds

The major reasons why investors purchase mutual funds are professional management and diversification.

High-yield bond funds are sometimes referred to as junk-bond funds.

An investor is planning to systematically withdraw money from his open-end fund.He arranges to receive 40 percent of the $700 asset growth from this particular investment period.The amount he will receive is:

Income dividends are the earnings a fund pays to shareholders from its dividend and interest income.

Another name for a mutual fund that doesn't levy a sales charge,but does charge an ongoing higher 12b-1 fee is a class ________ fund.

If an investor uses a reinvestment plan to invest income dividends and capital-gain distributions:

Which of the following states that it is impossible to consistently beat the market without raising your risk level?

A contingent deferred sales load,which is a charge that shareholders pay when they withdraw their investment from a mutual fund,can be as low as 1 percent or as high as ________ depending on how long you own the mutual fund before making a withdrawal.

Which of the following is true?

A mutual fund that only invests in companies outside the United States is called a(n)________ fund.

Which of the following is a disadvantage associated with purchasing a mutual fund?

Asset allocation funds invest in various asset classes including stocks,bonds,fixed-income securities,and money market instruments.

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all in the natural resources industry.What type of mutual fund is he buying?

Which one of the following publications does not provide readers with information about mutual funds and investing?

Which type of mutual fund invests in high-yield,high-risk corporate bonds?

Noelle Simon is buying shares in a mutual fund that only invests in companies located in the Latin America area.What type of mutual fund is this?

Which of the following statements is false?

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

A mutual fund that invests in investment-grade corporate debt with maturities between 3 and 10 years is called a(n)________ fund.

The New American Enterprise Mutual Fund's portfolio is valued at $60 million.The fund has liabilities of $2 million,and the investment company sponsoring the fund has issued 2,900,000 shares.What is the fund's net asset value?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters