Exam 3: Indirect Investing

What are some advantages investors seek by buying mutual funds or closed-end investment company shares rather than through purchasing securities directly?

Total return for a mutual fund includes capital gains less any reinvested dividends.

Which type of hedge fund seldom takes short positions in securities?

Gordon placed a buy order for a security that represented a claim to the largest stocks in the U.S. Gordon placed the order in the morning, but the transaction price was based on the end-of-day price. Gordon purchased:

Hector purchased a fund that had an asset allocation of 40% debt and 60% equity. Hector bought the fund at a 10% discount from NAV. Hector purchased:

Which of the following is a major objective of unit investment trusts?

John invested in a market neutral hedge fund, while Mary invested in a S&P 500 index fund. Relative to John's investment, Mary's investment is expected to have:

Which of the following is true regarding value funds and growth funds?

You would expect a value fund to buy stock based on a sound earnings record while growth funds might invest in companies with no earnings record at all.

If a mutual fund holds a substantial amount of Treasury bills, it is probably a:

Which of the following types of hedge funds has two layers of fees?

No-load funds sell:

Which of the following funds would you expect to experience the worst relative performance during a strong bull market?

Gordon indicates that he recently purchased shares in an investment fund. The shares were purchased from another investor through his broker. He paid more than the fund's NAV. What type of fund did Gordon most likely purchase?

At 1:00 p.m. on February 6, Phil purchased a security that represented a claim to the Nasdaq 100. At 3:00 p.m. the same day he sold the claim and realized a $2,000 gain. The security Phil purchased was a:

Hector purchased a fund that had an asset allocation of 30% U.S. equities and 70% foreign equities. Hector bought the fund at a 15% discount from its NAV. Hector most likely purchased:

Which of the following is not one of the features of exchange traded funds (ETFs)?

An unmanaged fixed-income security portfolio handled by an independent trustee is known as a:

On average, which type of mutual fund is expected to have the highest performance?

What are the four distinct types of investment companies?