Question 1

Which of the following is a reason to invest in mutual funds?

Accepted Answer

A)  Mutual funds are free of any hidden costs. 
B)  Mutual funds earn tax-free returns. 
C)  Mutual funds provide a guaranteed return in spite of market risks. 
D)  Mutual funds provide diversification of invested funds. 
E)  Mutual funds do not charge any fees. 
A)  Mutual funds are free of any hidden costs. 
B)  Mutual funds earn tax-free returns. 
C)  Mutual funds provide a guaranteed return in spite of market risks. 
D)  Mutual funds provide diversification of invested funds. 
E)  Mutual funds do not charge any fees.

Question 2

Which of the following bond mutual funds invest in tax-exempt securities?

Accepted Answer

A)  High-yield corporate bond funds 
B)  Municipal bond funds 
C)  Convertible bond funds 
D)  Mortgage-backed bond funds 
E)  Intermediate-term bond funds 
A)  High-yield corporate bond funds 
B)  Municipal bond funds 
C)  Convertible bond funds 
D)  Mortgage-backed bond funds 
E)  Intermediate-term bond funds

Question 3

For tax purposes, real estate is considered an active investment.

Accepted Answer

A) True 
 B)False

Question 4

High-grade corporate bond funds invest chiefly in investment-grade securities rated _____ or better.

Accepted Answer

A)  AA 
B)  D 
C)  BBB 
D)  CCC 
E)  AAA 
A)  AA 
B)  D 
C)  BBB 
D)  CCC 
E)  AAA

Question 5

Mutual funds and exchange-traded funds (ETFs) provide professional money management.

Accepted Answer

A) True 
 B)False

Question 6

Purchasing raw land as an investment is highly risky.

Accepted Answer

A) True 
 B)False

Question 7

A(n) _____ sells fund shares, either directly to the public or through authorized dealers.

Accepted Answer

A)  investment advisor 
B)  custodian 
C)  transfer agent 
D)  distributor 
E)  money manager 
A)  investment advisor 
B)  custodian 
C)  transfer agent 
D)  distributor 
E)  money manager

Question 8

Open-ended mutual funds can be traded on an intraday basis.

Accepted Answer

A) True 
 B)False

Question 9

A general-purpose money fund:

Accepted Answer

A)  invests in virtually any type of money market investment vehicle. 
B)  limits its investments to short-term, tax-exempt municipal securities. 
C)  limits its investments to short-term securities of the U.S. government and its agencies. 
D)  invests in stock considered to be undervalued in the market. 
E)  limits its investments to real estate properties. 
A)  invests in virtually any type of money market investment vehicle. 
B)  limits its investments to short-term, tax-exempt municipal securities. 
C)  limits its investments to short-term securities of the U.S. government and its agencies. 
D)  invests in stock considered to be undervalued in the market. 
E)  limits its investments to real estate properties.

Question 10

Growth-and-income funds invest most of their capital in common stocks.

Accepted Answer

A) True 
 B)False

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
The market value of your mutual fund shares will move in the [ same | opposite ] direction as the market value of the underlying securities.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
You could drop an automatic investment plan [ at any time | only by fulfilling the original agreement ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 13

Asset allocation funds invest in stocks, bonds, and money market securities.

Accepted Answer

A) True 
 B)False

Question 14

Dividend income, capital gains distribution, and change in the fund's share price are all potential sources of returns for a mutual fund investor.

Accepted Answer

A) True 
 B)False

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
Real estate typically exhibits [ less | more ] volatility than stocks.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 16

The individual manager of a mutual fund or an exchange-traded fund (ETF) has little to do with the fund's success.

Accepted Answer

A) True 
 B)False

Question 17

An annual fee charged by a number of open-end mutual funds that's supposed to be used to offset promotion and selling expenses is called the:

Accepted Answer

A)  management fee. 
B)  back-end load fee. 
C)  transaction fee. 
D)  12b-1 fee. 
E)  low-load fee. 
A)  management fee. 
B)  back-end load fee. 
C)  transaction fee. 
D)  12b-1 fee. 
E)  low-load fee.

Question 18

Exchange-traded funds (ETFs):

Accepted Answer

A)  have become more popular as a form of investment in recent years. 
B)  are closed-end funds with a fixed number of shares outstanding. 
C)  always distribute their capital gains to fund holders, resulting in low taxes. 
D)  are actively managed by investors, resulting in high costs and high taxes. 
E)  fill their buy and sell orders at the closing prices at the end of the trading day. 
A)  have become more popular as a form of investment in recent years. 
B)  are closed-end funds with a fixed number of shares outstanding. 
C)  always distribute their capital gains to fund holders, resulting in low taxes. 
D)  are actively managed by investors, resulting in high costs and high taxes. 
E)  fill their buy and sell orders at the closing prices at the end of the trading day.

Question 19

Which of the following combines some of the operating characteristics of an open-end fund with some of the trading characteristics of a closed-end fund?

Accepted Answer

A)  Preferred fund 
B)  Common fund 
C)  Exchange-traded fund (ETF) 
D)  Net asset fund 
E)  Unit investment fund 
A)  Preferred fund 
B)  Common fund 
C)  Exchange-traded fund (ETF) 
D)  Net asset fund 
E)  Unit investment fund

Question 20

Which of the following real estate investment trusts (REITs) is the most attractive to income-oriented investors?

Accepted Answer

A)  Equity 
B)  Mortgage 
C)  Back-end load 
D)  Unit trust 
E)  Exchange-traded 
A)  Equity 
B)  Mortgage 
C)  Back-end load 
D)  Unit trust 
E)  Exchange-traded

Which of the following is a reason to invest in mutual funds?

Which of the following bond mutual funds invest in tax-exempt securities?

For tax purposes, real estate is considered an active investment.

High-grade corporate bond funds invest chiefly in investment-grade securities rated _____ or better.

Mutual funds and exchange-traded funds (ETFs) provide professional money management.

Purchasing raw land as an investment is highly risky.

A(n) _____ sells fund shares, either directly to the public or through authorized dealers.

Open-ended mutual funds can be traded on an intraday basis.

A general-purpose money fund:

Growth-and-income funds invest most of their capital in common stocks.

Asset allocation funds invest in stocks, bonds, and money market securities.

Dividend income, capital gains distribution, and change in the fund's share price are all potential sources of returns for a mutual fund investor.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Real estate typically exhibits [ less | more ] volatility than stocks.

The individual manager of a mutual fund or an exchange-traded fund (ETF) has little to do with the fund's success.

An annual fee charged by a number of open-end mutual funds that's supposed to be used to offset promotion and selling expenses is called the:

Exchange-traded funds (ETFs):

Which of the following combines some of the operating characteristics of an open-end fund with some of the trading characteristics of a closed-end fund?

Which of the following real estate investment trusts (REITs) is the most attractive to income-oriented investors?

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters

Exam 13: Investing in Mutual Funds and Real Estate

Which of the following is a reason to invest in mutual funds?

Which of the following bond mutual funds invest in tax-exempt securities?

For tax purposes, real estate is considered an active investment.

High-grade corporate bond funds invest chiefly in investment-grade securities rated _____ or better.

Mutual funds and exchange-traded funds (ETFs) provide professional money management.

Purchasing raw land as an investment is highly risky.

A(n) _____ sells fund shares, either directly to the public or through authorized dealers.

Open-ended mutual funds can be traded on an intraday basis.

A general-purpose money fund:

Growth-and-income funds invest most of their capital in common stocks.

Asset allocation funds invest in stocks, bonds, and money market securities.

Dividend income, capital gains distribution, and change in the fund's share price are all potential sources of returns for a mutual fund investor.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. Real estate typically exhibits [ less | more ] volatility than stocks.

The individual manager of a mutual fund or an exchange-traded fund (ETF) has little to do with the fund's success.

An annual fee charged by a number of open-end mutual funds that's supposed to be used to offset promotion and selling expenses is called the:

Exchange-traded funds (ETFs):

Which of the following combines some of the operating characteristics of an open-end fund with some of the trading characteristics of a closed-end fund?

Which of the following real estate investment trusts (REITs) is the most attractive to income-oriented investors?

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters