Question 1

Which of the following stock funds would probably have the lowest risk and return?

Accepted Answer

A) TSX Index 
B) Capital appreciation 
C) Dividend 
D) Technology Sector 
A) TSX Index 
B) Capital appreciation 
C) Dividend 
D) Technology Sector

Question 2

What would be the return on a $1000 investment in a mutual fund whose NAV is $20? The fund has a 3 percent front-end load and,during the holding period,$400 of fund distributions are reinvested at a NAV of $25 (no load applied to reinvestment).The fund is ultimately sold at a NAV of $24.(Round to the nearest tenth of a percent. )

Accepted Answer

The answer of What would be the return on a...

Question 3

At 55 years of age you may want to reduce risk by switching from very aggressive funds to balanced funds.If your portfolio is worth $498 000 and your family fund company charges you a 2 percent switch fee and 3 percent redemption fee,what will it cost to change funds?

Accepted Answer

A) $4980 
B) $9960 
C) $24 900 
D) $14 940 
A) $4980 
B) $9960 
C) $24 900 
D) $14 940

Question 4

Investing in which of the following funds will typically give you the least diversification?

Accepted Answer

A) Growth funds 
B) Large-Cap funds 
C) Equity income funds 
D) Sector funds 
A) Growth funds 
B) Large-Cap funds 
C) Equity income funds 
D) Sector funds

Question 5

The most important considerations in choosing a mutual fund or an investment company involves reviewing past performance and comparing fees and expenses charged.

Accepted Answer

A) True 
 B)False

Question 6

Both segregated funds and mutual funds generally offer creditor protection in the event of bankruptcy.

Accepted Answer

A) True 
 B)False

Question 7

What is the most important difference between an index mutual fund and an exchange traded fund (ETF)?

Accepted Answer

A) ETFs are better managed. 
B) ETFs trade like stocks. 
C) There are more types of ETFs. 
D) ETFs have higher MERs. 
A) ETFs are better managed. 
B) ETFs trade like stocks. 
C) There are more types of ETFs. 
D) ETFs have higher MERs.

Question 8

When comparing the MERs and performance of various mutual funds it is important to include only ones with similar objectives.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following applies to global bond funds in comparison to Canadian bond funds?

Accepted Answer

A) They are a safe way to ensure higher yields. 
B) They have less interest rate risk,but more exchange rate risk. 
C) The currency rate risk is offset by the diversification benefits. 
D) They have potential for higher yields and have higher risk. 
A) They are a safe way to ensure higher yields. 
B) They have less interest rate risk,but more exchange rate risk. 
C) The currency rate risk is offset by the diversification benefits. 
D) They have potential for higher yields and have higher risk.

Question 10

Which of the following is True about MERs?

Accepted Answer

A) MERs only include manager and sales expenses. 
B) Mutual funds with lower MERs tend to outperform those with higher. 
C) All types of mutual funds have similar MERs. 
D) You need to subtract the MER from the posted return to figure out performance. 
A) MERs only include manager and sales expenses. 
B) Mutual funds with lower MERs tend to outperform those with higher. 
C) All types of mutual funds have similar MERs. 
D) You need to subtract the MER from the posted return to figure out performance.

Question 11

If Raymond does not want to pay any fees to invest in mutual funds,he should pick

Accepted Answer

A) no-load mutual funds. 
B) front-end load mutual funds. 
C) back-end load mutual funds. 
D) zero-fee mutual funds. 
A) no-load mutual funds. 
B) front-end load mutual funds. 
C) back-end load mutual funds. 
D) zero-fee mutual funds.

Question 12

Studies show that segregated funds

Accepted Answer

A) consistently outperform stock markets because of their guarantee. 
B) consistently outperform mutual funds because of the probate fees. 
C) consistently underperform mutual funds because of their higher expenses. 
D) consistently outperform mutual funds because of the important insurance option. 
A) consistently outperform stock markets because of their guarantee. 
B) consistently outperform mutual funds because of the probate fees. 
C) consistently underperform mutual funds because of their higher expenses. 
D) consistently outperform mutual funds because of the important insurance option.

Question 13

Global bond funds

Accepted Answer

A) are issued by Canadian firms or governments. 
B) are always higher yielding than Canadian bond funds. 
C) are subject to interest and exchange rate risk. 
D) cannot include Canadian bonds. 
A) are issued by Canadian firms or governments. 
B) are always higher yielding than Canadian bond funds. 
C) are subject to interest and exchange rate risk. 
D) cannot include Canadian bonds.

Question 14

Index stock funds contain every company's stock that make up the particular index.

Accepted Answer

A) True 
 B)False

Question 15

List considerations you should take into account when purchasing a mutual fund.

Accepted Answer

Your personal risk tolerance and goals f

Question 16

Which of the following bond mutual funds have both the highest default risk and interest rate risk?

Accepted Answer

A) Long-term AAA corporate bonds 
B) Short-term BBB corporate bonds 
C) Short-term high-yield corporate bonds 
D) High-yield long-term corporate bonds 
A) Long-term AAA corporate bonds 
B) Short-term BBB corporate bonds 
C) Short-term high-yield corporate bonds 
D) High-yield long-term corporate bonds

Question 17

Two advantages of investing in mutual funds are diversification,marketability and professional management.

Accepted Answer

A) True 
 B)False

Question 18

In evaluating the performance of your Canadian equity mutual fund,the most appropriate comparison would be its performance relative to the

Accepted Answer

A) cost of living (CPI)index. 
B) S&P 500 index. 
C) Dow Jones index. 
D) TSX index. 
A) cost of living (CPI)index. 
B) S&P 500 index. 
C) Dow Jones index. 
D) TSX index.

Question 19

A mutual fund that buys only the stocks of the TSX is a good example of a sector fund.

Accepted Answer

A) True 
 B)False

Question 20

Which is the best reason for investing in funds?

Accepted Answer

A) Management expense ratios 
B) Portfolio managers' performance 
C) Sector investment goals 
D) Diversification 
A) Management expense ratios 
B) Portfolio managers' performance 
C) Sector investment goals 
D) Diversification

Which of the following stock funds would probably have the lowest risk and return?

At 55 years of age you may want to reduce risk by switching from very aggressive funds to balanced funds.If your portfolio is worth $498 000 and your family fund company charges you a 2 percent switch fee and 3 percent redemption fee,what will it cost to change funds?

Investing in which of the following funds will typically give you the least diversification?

The most important considerations in choosing a mutual fund or an investment company involves reviewing past performance and comparing fees and expenses charged.

Both segregated funds and mutual funds generally offer creditor protection in the event of bankruptcy.

What is the most important difference between an index mutual fund and an exchange traded fund (ETF)?

When comparing the MERs and performance of various mutual funds it is important to include only ones with similar objectives.

Which of the following applies to global bond funds in comparison to Canadian bond funds?

Which of the following is True about MERs?

If Raymond does not want to pay any fees to invest in mutual funds,he should pick

Studies show that segregated funds

Global bond funds

Index stock funds contain every company's stock that make up the particular index.

List considerations you should take into account when purchasing a mutual fund.

Which of the following bond mutual funds have both the highest default risk and interest rate risk?

Two advantages of investing in mutual funds are diversification,marketability and professional management.

In evaluating the performance of your Canadian equity mutual fund,the most appropriate comparison would be its performance relative to the

A mutual fund that buys only the stocks of the TSX is a good example of a sector fund.

Which is the best reason for investing in funds?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 13: Personal Investing - Investing in Mutual Funds

Which of the following stock funds would probably have the lowest risk and return?

At 55 years of age you may want to reduce risk by switching from very aggressive funds to balanced funds.If your portfolio is worth $498 000 and your family fund company charges you a 2 percent switch fee and 3 percent redemption fee,what will it cost to change funds?

Investing in which of the following funds will typically give you the least diversification?

The most important considerations in choosing a mutual fund or an investment company involves reviewing past performance and comparing fees and expenses charged.

Both segregated funds and mutual funds generally offer creditor protection in the event of bankruptcy.

What is the most important difference between an index mutual fund and an exchange traded fund (ETF)?

When comparing the MERs and performance of various mutual funds it is important to include only ones with similar objectives.

Which of the following applies to global bond funds in comparison to Canadian bond funds?

Which of the following is True about MERs?

If Raymond does not want to pay any fees to invest in mutual funds,he should pick

Studies show that segregated funds

Global bond funds

Index stock funds contain every company's stock that make up the particular index.

List considerations you should take into account when purchasing a mutual fund.

Which of the following bond mutual funds have both the highest default risk and interest rate risk?

Two advantages of investing in mutual funds are diversification,marketability and professional management.

In evaluating the performance of your Canadian equity mutual fund,the most appropriate comparison would be its performance relative to the

A mutual fund that buys only the stocks of the TSX is a good example of a sector fund.

Which is the best reason for investing in funds?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters