Question 1

Caroline Campbell is buying shares in a mutual fund that invests in bonds offered by foreign companies and governments.What type of mutual fund is she buying?

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 2

A load fund is a mutual fund in which investors pay a commission either when they purchase shares.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a source of detailed information for fund investments?

Accepted Answer

A) Internet 
B) Professional advisory services 
C) The fund's annual report and prospectus 
D) Financial publications 
E) All of these 
A) Internet 
B) Professional advisory services 
C) The fund's annual report and prospectus 
D) Financial publications 
E) All of these

Question 4

Many financial planners recommend that investors choose a mutual fund with an expense ratio that is:

Accepted Answer

A) 1 percent or less. 
B) between 1 and 2 percent. 
C) between 2 and 3 percent. 
D) between 3 and 4 percent. 
E) over 4 percent. 
A) 1 percent or less. 
B) between 1 and 2 percent. 
C) between 2 and 3 percent. 
D) between 3 and 4 percent. 
E) over 4 percent.

Question 5

Together,all the different management fees,12b-1 fees,and additional operating costs for a specific fund are referred to as a(n):

Accepted Answer

A) investment ratio. 
B) expense ratio. 
C) financial ratio. 
D) expense turnover. 
E) management ratio. 
A) investment ratio. 
B) expense ratio. 
C) financial ratio. 
D) expense turnover. 
E) management ratio.

Question 6

Which one of the following statements is false regarding exchange-traded funds?

Accepted Answer

A) An exchange-traded fund generally invests in the stocks or securities contained in a specific stock or securities index. 
B) With an exchange-traded fund,an investor can purchase as little as one share. 
C) The majority of exchange-traded funds tend to mirror the performance of the index. 
D) A passively managed exchange-traded fund manager needs to make more decisions than an actively-managed mutual fund manager. 
E) No minimum dollar investment amount is required for exchange-traded funds. 
A) An exchange-traded fund generally invests in the stocks or securities contained in a specific stock or securities index. 
B) With an exchange-traded fund,an investor can purchase as little as one share. 
C) The majority of exchange-traded funds tend to mirror the performance of the index. 
D) A passively managed exchange-traded fund manager needs to make more decisions than an actively-managed mutual fund manager. 
E) No minimum dollar investment amount is required for exchange-traded funds.

Question 7

Contingent deferred sales loads may also be referred to as ________ loads.

Accepted Answer

A) front-end 
B) back-end 
C) level 
D) purchase 
E) investiture 
A) front-end 
B) back-end 
C) level 
D) purchase 
E) investiture

Question 8

What percent of mutual funds receive a 5-star rating from Morningstar?

Accepted Answer

A) 5 
B) 10 
C) 15 
D) 20 
E) 25 
A) 5 
B) 10 
C) 15 
D) 20 
E) 25

Question 9

If you need your money in a short period of time,you should consider conservative investments with less risk.

Accepted Answer

A) True 
 B)False

Question 10

Phyllis Payne is buying shares in a mutual fund that invests in companies with a long history of paying a dividend whose objective is to provide income to shareholders.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 fund 
A) Aggressive growth fund 
B) Equity income fund 
C) Global stock fund 
D) International fund 
E) Regional fund

Question 11

Who owns the most mutual funds?

Accepted Answer

A) Investors less than 20 years old 
B) Investors between 18 and 36 years old 
C) Investors between 37 to 52 years old 
D) Investors between 53 to 71 years old 
E) Investors over 72 years old 
A) Investors less than 20 years old 
B) Investors between 18 and 36 years old 
C) Investors between 37 to 52 years old 
D) Investors between 53 to 71 years old 
E) Investors over 72 years old

Question 12

Which one of the following statements is false?

Accepted Answer

A) As an investor,you should be concerned with how long a fund manager has been managing a mutual fund. 
B) The fund manager chooses when to buy and sell securities in the fund. 
C) If a manager has been managing a fund for 5 or 10 years,it is time to change managers and get someone with new ideas. 
D) The fund manager is responsible for choosing the securities that are contained in the fund. 
E) Managed funds have higher fees than index funds. 
A) As an investor,you should be concerned with how long a fund manager has been managing a mutual fund. 
B) The fund manager chooses when to buy and sell securities in the fund. 
C) If a manager has been managing a fund for 5 or 10 years,it is time to change managers and get someone with new ideas. 
D) The fund manager is responsible for choosing the securities that are contained in the fund. 
E) Managed funds have higher fees than index funds.

Question 13

The sales charge for purchasing shares in a load fund is ________ percent of the purchase price.

Accepted Answer

A) an average of 0.50 to 1 
B) an average of 1 to 2 
C) an average of 2 to 4 
D) an average of 5 to 9 1/2 
E) as high as 8 1/2 
A) an average of 0.50 to 1 
B) an average of 1 to 2 
C) an average of 2 to 4 
D) an average of 5 to 9 1/2 
E) as high as 8 1/2

Question 14

Class C shares,with their ongoing higher 12b-1 fees,may be more expensive than Class A shares over a period of years.

Accepted Answer

A) True 
 B)False

Question 15

The turnover ratio of a mutual fund measures the:

Accepted Answer

A) length of time a manager has been in charge of the fund. 
B) amount of profit the fund earns from one investment period to the next. 
C) number of months the average investor holds the fund before selling. 
D) percentage of a fund's holdings that have changed or "been replaced" during a 12-month period. 
E) percentage of institutional investors who own the fund. 
A) length of time a manager has been in charge of the fund. 
B) amount of profit the fund earns from one investment period to the next. 
C) number of months the average investor holds the fund before selling. 
D) percentage of a fund's holdings that have changed or "been replaced" during a 12-month period. 
E) percentage of institutional investors who own the fund.

Question 16

Because of front-end commission charges,many financial experts and government regulatory agencies are critical of:

Accepted Answer

A) regular accounts. 
B) voluntary savings plans. 
C) contractual savings plans. 
D) minimum withdrawal plans. 
E) free contract plans. 
A) regular accounts. 
B) voluntary savings plans. 
C) contractual savings plans. 
D) minimum withdrawal plans. 
E) free contract plans.

Question 17

There are about ________ investment companies that offer exchange-traded funds.

Accepted Answer

A) 25 
B) 50 
C) 150 
D) 1,900 
E) 10,000 
A) 25 
B) 50 
C) 150 
D) 1,900 
E) 10,000

Question 18

Which one of the following statements is false regarding mutual funds and the internet?

Accepted Answer

A) Many investors have found a wealth of information about mutual fund investments on the internet. 
B) It is possible to obtain current market values for a mutual fund by using the internet. 
C) Most investment companies that sponsor mutual funds have a websites. 
D) Professional advisory services are prohibited from discussing mutual funds on their websites. 
E) The investment companies' website will provide procedures for opening an account,how much money is required to open an account,and statistical information about individual funds. 
A) Many investors have found a wealth of information about mutual fund investments on the internet. 
B) It is possible to obtain current market values for a mutual fund by using the internet. 
C) Most investment companies that sponsor mutual funds have a websites. 
D) Professional advisory services are prohibited from discussing mutual funds on their websites. 
E) The investment companies' website will provide procedures for opening an account,how much money is required to open an account,and statistical information about individual funds.

Question 19

Mutual funds that allocate their investments among common stocks and bonds are referred to as small cap funds.

Accepted Answer

A) True 
 B)False

Question 20

Over ________ investment companies offer open-end funds.

Accepted Answer

A) 100 
B) 1,000 
C) 3,000 
D) 6,000 
E) 9,000 
A) 100 
B) 1,000 
C) 3,000 
D) 6,000 
E) 9,000

Caroline Campbell is buying shares in a mutual fund that invests in bonds offered by foreign companies and governments.What type of mutual fund is she buying?

A load fund is a mutual fund in which investors pay a commission either when they purchase shares.

Which of the following is a source of detailed information for fund investments?

Many financial planners recommend that investors choose a mutual fund with an expense ratio that is:

Together,all the different management fees,12b-1 fees,and additional operating costs for a specific fund are referred to as a(n):

Which one of the following statements is false regarding exchange-traded funds?

Contingent deferred sales loads may also be referred to as ________ loads.

What percent of mutual funds receive a 5-star rating from Morningstar?

If you need your money in a short period of time,you should consider conservative investments with less risk.

Phyllis Payne is buying shares in a mutual fund that invests in companies with a long history of paying a dividend whose objective is to provide income to shareholders.What type of mutual fund is she buying?

Who owns the most mutual funds?

Which one of the following statements is false?

The sales charge for purchasing shares in a load fund is ________ percent of the purchase price.

Class C shares,with their ongoing higher 12b-1 fees,may be more expensive than Class A shares over a period of years.

The turnover ratio of a mutual fund measures the:

Because of front-end commission charges,many financial experts and government regulatory agencies are critical of:

There are about ________ investment companies that offer exchange-traded funds.

Which one of the following statements is false regarding mutual funds and the internet?

Mutual funds that allocate their investments among common stocks and bonds are referred to as small cap funds.

Over ________ investment companies offer open-end funds.

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

Caroline Campbell is buying shares in a mutual fund that invests in bonds offered by foreign companies and governments.What type of mutual fund is she buying?

A load fund is a mutual fund in which investors pay a commission either when they purchase shares.

Which of the following is a source of detailed information for fund investments?

Many financial planners recommend that investors choose a mutual fund with an expense ratio that is:

Together,all the different management fees,12b-1 fees,and additional operating costs for a specific fund are referred to as a(n):

Which one of the following statements is false regarding exchange-traded funds?

Contingent deferred sales loads may also be referred to as ________ loads.

What percent of mutual funds receive a 5-star rating from Morningstar?

If you need your money in a short period of time,you should consider conservative investments with less risk.

Phyllis Payne is buying shares in a mutual fund that invests in companies with a long history of paying a dividend whose objective is to provide income to shareholders.What type of mutual fund is she buying?

Who owns the most mutual funds?

Which one of the following statements is false?

The sales charge for purchasing shares in a load fund is ________ percent of the purchase price.

Class C shares,with their ongoing higher 12b-1 fees,may be more expensive than Class A shares over a period of years.

The turnover ratio of a mutual fund measures the:

Because of front-end commission charges,many financial experts and government regulatory agencies are critical of:

There are about ________ investment companies that offer exchange-traded funds.

Which one of the following statements is false regarding mutual funds and the internet?

Mutual funds that allocate their investments among common stocks and bonds are referred to as small cap funds.

Over ________ investment companies offer open-end funds.

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