Exam 17: Investing in Mutual Funds

Index funds incur ________ expenses and are ________ managed compared to other funds.

________ funds are mutual funds that attempt to mirror the movements of existing broad market indicators.

In deciding if a no-load mutual fund is a good investment for you, you should carefully consider all of the following, except

In assessing different mutual funds, the returns vary, but the expenses are fixed.

Which of the following is not included in the prospectus?

In general, it is prudent to purchase a no-load fund instead of a load fund.

Unlike mutual funds, ETFs are traded on the stock exchange just like common stock.

Advantages of investing in mutual funds include all of the following, except

You may purchase an open-end no-load mutual fund in all of the following ways, except

Capital appreciation funds tend to invest in stocks that distribute little or no dividends so that earnings can be reinvested for expansion.

High yield (junk) bond funds focus on relatively risky bonds issued by firms that are subject to

To calculate the NAV, the market value of the portfolio less liabilities is divided by the ________ to arrive at a per-share basis.

Which of the following statements about hedge funds is not true?

Investors in high tax brackets will normally achieve higher performance by selecting mutual funds that generate

On January 1, you invest $10,000 in an open-end mutual fund selling for $25 per share that has a 2% load, 1.5% management fee and 1% 12b-1 expense s. If the fund NAV appreciates to $28 by the time you sell it on December 31, what was your return on investment?

List the following four types of medium-term bond mutual funds in order from the lowest default risk to the highest: Ginnie Mae, corporate, high-yield, Treasury.

What would be the tax consequence of owning a mutual fund that made distributions of $600 resulting from short-term capital gains and $800 resulting from long-term capital gains assuming a 30% tax bracket and a 10% capital gains rate?

Use the following two columns of items to answer the matching questions below: -balanced growth and income funds A)funds that sell shares to individuals and invest the proceeds in bonds B)mutual funds that focus on firms that pay a high level of dividends C)mutual funds that focus on a specific industry D)mutual funds that contain both growth stocks and stocks that pay dividends E)mutual funds that focus on stocks that are expected to grow at a very high rate

You are considering investing in a no-load mutual fund that focuses on growth stocks or in an index fund. The growth stock fund had a gross annual return of 15% and expenses of 2%. The index fund had a gross annual return of 12% and expenses of 1%. Assuming equal risk, you should buy

On average, mutual funds have an expense ratio of about 3%.