Question 1

Although mutual funds are popular among individual investors,most people do not use them as part of an IRA or retirement account.

Accepted Answer

A) True 
 B)False

Question 2

When one investment company manages a group of mutual funds,it is called a:

Accepted Answer

A) family of funds. 
B) exchange fund. 
C) diversification fund. 
D) versatility fund. 
E) asset allocation fund. 
A) family of funds. 
B) exchange fund. 
C) diversification fund. 
D) versatility fund. 
E) asset allocation fund.

Question 3

Joseph Carter is buying shares in a mutual fund that is investing in stocks throughout the world,including the United States.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 4

A mutual fund in which no sales charge is paid by the individual investor is called a(n)________ fund.

Accepted Answer

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

Question 5

Tiffany Scott puts $8,000 into a load mutual fund.She knows that her up-front sales charge is 5%.How much of her money actually goes to buy shares in the mutual fund?

Accepted Answer

A) $8,000 
B) $7,600 
C) $500 
D) $400 
E) $5 
A) $8,000 
B) $7,600 
C) $500 
D) $400 
E) $5

Question 6

Because an index mutual fund is a mirror image of a specific index,the dollar value of a share in an index fund increases when the index increases.

Accepted Answer

A) True 
 B)False

Question 7

A mutual fund that provides tax-free interest income is referred to as a long-term U.S.bond fund.

Accepted Answer

A) True 
 B)False

Question 8

Cindy and John Appleby just inherited $30,000 and would like to invest the money in a conservative mutual fund.Since they have never invested in mutual funds,they ask for your help.Describe the sources of information available for evaluating a mutual fund investment.

Accepted Answer

The following factors can be used to eva

Question 9

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential,financial reward,or security.

Accepted Answer

A) True 
 B)False

Question 10

Contingent deferred sales loads generally:

Accepted Answer

A) apply until the shares you own are in the fund for 10 years or more. 
B) apply regardless of how long your shares have been invested. 
C) increase as the length of time you have been in the fund increases. 
D) decline gradually until there is no withdrawal fee if you own the shares for more than five years. 
E) apply only for the first year funds are invested. 
A) apply until the shares you own are in the fund for 10 years or more. 
B) apply regardless of how long your shares have been invested. 
C) increase as the length of time you have been in the fund increases. 
D) decline gradually until there is no withdrawal fee if you own the shares for more than five years. 
E) apply only for the first year funds are invested.

Question 11

Which of the following seeks high total return by maintaining precise amounts within each of the various types of asset that the fund invests in?

Accepted Answer

A) Funds of fund 
B) Family of funds 
C) Fixed-income securities 
D) Money market instruments 
E) Asset allocation fund 
A) Funds of fund 
B) Family of funds 
C) Fixed-income securities 
D) Money market instruments 
E) Asset allocation fund

Question 12

Which of the following is an advantage of an exchange-traded fund?

Accepted Answer

A) No minimum investment amount 
B) Buy and sell shares through a securities exchange at any time during the business day 
C) Lower management fees than closed-end or open-end funds 
D) Using limit orders to both buy and sell 
E) All of these are advantages of ETFs. 
A) No minimum investment amount 
B) Buy and sell shares through a securities exchange at any time during the business day 
C) Lower management fees than closed-end or open-end funds 
D) Using limit orders to both buy and sell 
E) All of these are advantages of ETFs.

Question 13

The potential return on any investment should be indirectly related to the risk the investor assumes.

Accepted Answer

A) True 
 B)False

Question 14

What is the most common reason given by American mutual fund owners for investing in funds?

Accepted Answer

A) To reduce taxable income 
B) Saving for someone's education 
C) Saving for emergencies 
D) Saving for retirement 
E) Saving for a new car 
A) To reduce taxable income 
B) Saving for someone's education 
C) Saving for emergencies 
D) Saving for retirement 
E) Saving for a new car

Question 15

While mutual fund income dividends are subject to taxation,capital gain distributions are not subject to taxation.

Accepted Answer

A) True 
 B)False

Question 16

When Pete Mills went to withdraw $3,000 from the Nationwide Fidelity Mutual fund,he was informed that the fund would charge 4 percent of the amount withdrawn.What is the dollar amount of the withdrawal charge?

Accepted Answer

A) $400 
B) $300 
C) $120 
D) $40 
E) $30 
A) $400 
B) $300 
C) $120 
D) $40 
E) $30

Question 17

Melanie Davis is getting ready to purchase shares in a mutual fund.The fund will charge her a one-time back-end load fee only if she redeems her shares within a stated period of time (usually 5 years).What type of shares is she buying?

Accepted Answer

A) Class A 
B) Class B 
C) Class C 
D) Either class A or B 
E) Either class B or C 
A) Class A 
B) Class B 
C) Class C 
D) Either class A or B 
E) Either class B or C

Question 18

Which of the following invests in U.S.Treasury securities?

Accepted Answer

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

Question 19

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following options can a mutual fund investor use to purchase shares in an open-end fund?

Accepted Answer

A) Regular account transaction 
B) Voluntary savings plan 
C) Contractual savings plan 
D) Reinvestment plan 
E) All of these are ways to purchase shares in an open-end fund. 
A) Regular account transaction 
B) Voluntary savings plan 
C) Contractual savings plan 
D) Reinvestment plan 
E) All of these are ways to purchase shares in an open-end fund.

Although mutual funds are popular among individual investors,most people do not use them as part of an IRA or retirement account.

When one investment company manages a group of mutual funds,it is called a:

Joseph Carter is buying shares in a mutual fund that is investing in stocks throughout the world,including the United States.What type of mutual fund is this?

A mutual fund in which no sales charge is paid by the individual investor is called a(n)________ fund.

Tiffany Scott puts $8,000 into a load mutual fund.She knows that her up-front sales charge is 5%.How much of her money actually goes to buy shares in the mutual fund?

Because an index mutual fund is a mirror image of a specific index,the dollar value of a share in an index fund increases when the index increases.

A mutual fund that provides tax-free interest income is referred to as a long-term U.S.bond fund.

Cindy and John Appleby just inherited $30,000 and would like to invest the money in a conservative mutual fund.Since they have never invested in mutual funds,they ask for your help.Describe the sources of information available for evaluating a mutual fund investment.

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential,financial reward,or security.

Contingent deferred sales loads generally:

Which of the following seeks high total return by maintaining precise amounts within each of the various types of asset that the fund invests in?

Which of the following is an advantage of an exchange-traded fund?

The potential return on any investment should be indirectly related to the risk the investor assumes.

What is the most common reason given by American mutual fund owners for investing in funds?

While mutual fund income dividends are subject to taxation,capital gain distributions are not subject to taxation.

When Pete Mills went to withdraw $3,000 from the Nationwide Fidelity Mutual fund,he was informed that the fund would charge 4 percent of the amount withdrawn.What is the dollar amount of the withdrawal charge?

Melanie Davis is getting ready to purchase shares in a mutual fund.The fund will charge her a one-time back-end load fee only if she redeems her shares within a stated period of time (usually 5 years).What type of shares is she buying?

Which of the following invests in U.S.Treasury securities?

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

Which of the following options can a mutual fund investor use to purchase shares in an open-end fund?

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

Exam 16: Investing in Mutual Funds

Although mutual funds are popular among individual investors,most people do not use them as part of an IRA or retirement account.

When one investment company manages a group of mutual funds,it is called a:

Joseph Carter is buying shares in a mutual fund that is investing in stocks throughout the world,including the United States.What type of mutual fund is this?

A mutual fund in which no sales charge is paid by the individual investor is called a(n)________ fund.

Tiffany Scott puts $8,000 into a load mutual fund.She knows that her up-front sales charge is 5%.How much of her money actually goes to buy shares in the mutual fund?

Because an index mutual fund is a mirror image of a specific index,the dollar value of a share in an index fund increases when the index increases.

A mutual fund that provides tax-free interest income is referred to as a long-term U.S.bond fund.

Cindy and John Appleby just inherited $30,000 and would like to invest the money in a conservative mutual fund.Since they have never invested in mutual funds,they ask for your help.Describe the sources of information available for evaluating a mutual fund investment.

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential,financial reward,or security.

Contingent deferred sales loads generally:

Which of the following seeks high total return by maintaining precise amounts within each of the various types of asset that the fund invests in?

Which of the following is an advantage of an exchange-traded fund?

The potential return on any investment should be indirectly related to the risk the investor assumes.

What is the most common reason given by American mutual fund owners for investing in funds?

While mutual fund income dividends are subject to taxation,capital gain distributions are not subject to taxation.

When Pete Mills went to withdraw $3,000 from the Nationwide Fidelity Mutual fund,he was informed that the fund would charge 4 percent of the amount withdrawn.What is the dollar amount of the withdrawal charge?

Melanie Davis is getting ready to purchase shares in a mutual fund.The fund will charge her a one-time back-end load fee only if she redeems her shares within a stated period of time (usually 5 years).What type of shares is she buying?

Which of the following invests in U.S.Treasury securities?

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

Which of the following options can a mutual fund investor use to purchase shares in an open-end fund?

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