Question 1

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Accepted Answer

A) True 
 B)False

Question 2

Mutual funds give smaller investors the same ability to diversify and reduce risk as big investors with a great deal of money have.

Accepted Answer

A) True 
 B)False

Question 3

Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund.

Accepted Answer

There is a stock mutual fund for almost

Question 4

Bernie has followed the three steps to begin mutual fund investing and is ready to make the purchase.What are his choices in buying?

Accepted Answer

A)  Use a broker. 
B)  Use a financial advisor. 
C)  Buy direct. 
D)  Buy through a mutual fund supermarket. 
E)  All of the above 
A)  Use a broker. 
B)  Use a financial advisor. 
C)  Buy direct. 
D)  Buy through a mutual fund supermarket. 
E)  All of the above

Question 5

At the beginning of 2014,bond funds-including both municipal and taxable bond funds-made up the largest segment of the $279 billion closed-end fund market.

Accepted Answer

A) True 
 B)False

Question 6

A sector fund is a mutual fund that tries to maximize the degree of diversification.

Accepted Answer

A) True 
 B)False

Question 7

"Classes" of mutual funds have different fee arrangements attached to them.

Accepted Answer

A) True 
 B)False

Question 8

For your investment program,you have occasionally been holding a few stocks that you purchased from various brokers.Based on this,which advantages of mutual funds would be appealing to you?

Accepted Answer

A)  Diversification 
B)  Professional management 
C)  Avoidance of bad brokers 
D)  only A and C 
E)  A, B, and C 
A)  Diversification 
B)  Professional management 
C)  Avoidance of bad brokers 
D)  only A and C 
E)  A, B, and C

Question 9

One of the most valuable mutual fund services available is automatic reinvestment of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

Former hedge fund manager Bernie Madoff ran a Ponzi scheme,in which he took money from new investors and used that money to pay earlier investors,all the while pocketing most of the money for himself.In the end,Madoff lost around ________ of his investors' money and ended up behind bars."

Accepted Answer

A)  $100 million 
B)  $5 billion 
C)  $25 billion 
D)  $50 billion 
A)  $100 million 
B)  $5 billion 
C)  $25 billion 
D)  $50 billion

Question 11

What does the following mathematical expression yield? (total market value of all securities - liabilities)divided by (total shares outstanding)=

Accepted Answer

A)  asset value. 
B)  net value. 
C)  net asset value. 
D)  net return value. 
E)  asset return value. 
A)  asset value. 
B)  net value. 
C)  net asset value. 
D)  net return value. 
E)  asset return value.

Question 12

You purchased 100 shares of a fund for $15.50 per share.Its current NAV is 20.75 per share.There were no distributions.What is your total return?

Accepted Answer

A)  33.87% 
B)  22.33% 
C)  79.67% 
D)  25.51% 
A)  33.87% 
B)  22.33% 
C)  79.67% 
D)  25.51%

Question 13

To obtain information about mutual funds you must always pay a fee.

Accepted Answer

A) True 
 B)False

Question 14

What sources of information does Art Keown,your textbook author,recommend when researching mutual fund investing?

Accepted Answer

A)  Yahoo! Finance 
B)  The Wall Street Journal 
C)  MoneyCentral 
D)  Morningstar Mutual Funds 
E)  All of the above 
A)  Yahoo! Finance 
B)  The Wall Street Journal 
C)  MoneyCentral 
D)  Morningstar Mutual Funds 
E)  All of the above

Question 15

A bond mutual fund is an appropriate choice for an investor with an income goal.

Accepted Answer

A) True 
 B)False

Question 16

One of the advantages of municipal bond funds is that

Accepted Answer

A)  they may be exempt from state taxes. 
B)  the interest is generally exempt from federal taxes. 
C)  they are all no-load funds. 
D)  both A and B are correct. 
A)  they may be exempt from state taxes. 
B)  the interest is generally exempt from federal taxes. 
C)  they are all no-load funds. 
D)  both A and B are correct.

Question 17

Investment companies are required by law to offer a prospectus to prospective investors.Let your instructor know which 5 parts you think are the most important and why.

Accepted Answer

The fund's goal and investment strategy

Question 18

Because mutual funds trade in such large quantities,they pay far more in terms of commissions.

Accepted Answer

A) True 
 B)False

Question 19

By law,all mutual funds must be broadly diversified.

Accepted Answer

A) True 
 B)False

Question 20

A closed-end fund trades more like common stock than a mutual fund.

Accepted Answer

A) True 
 B)False

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Mutual funds give smaller investors the same ability to diversify and reduce risk as big investors with a great deal of money have.

Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund.

Bernie has followed the three steps to begin mutual fund investing and is ready to make the purchase.What are his choices in buying?

At the beginning of 2014,bond funds-including both municipal and taxable bond funds-made up the largest segment of the $279 billion closed-end fund market.

A sector fund is a mutual fund that tries to maximize the degree of diversification.

"Classes" of mutual funds have different fee arrangements attached to them.

For your investment program,you have occasionally been holding a few stocks that you purchased from various brokers.Based on this,which advantages of mutual funds would be appealing to you?

One of the most valuable mutual fund services available is automatic reinvestment of cash flows.

Former hedge fund manager Bernie Madoff ran a Ponzi scheme,in which he took money from new investors and used that money to pay earlier investors,all the while pocketing most of the money for himself.In the end,Madoff lost around ________ of his investors' money and ended up behind bars."

What does the following mathematical expression yield? (total market value of all securities - liabilities)divided by (total shares outstanding)=

You purchased 100 shares of a fund for $15.50 per share.Its current NAV is 20.75 per share.There were no distributions.What is your total return?

To obtain information about mutual funds you must always pay a fee.

What sources of information does Art Keown,your textbook author,recommend when researching mutual fund investing?

A bond mutual fund is an appropriate choice for an investor with an income goal.

One of the advantages of municipal bond funds is that

Investment companies are required by law to offer a prospectus to prospective investors.Let your instructor know which 5 parts you think are the most important and why.

Because mutual funds trade in such large quantities,they pay far more in terms of commissions.

By law,all mutual funds must be broadly diversified.

A closed-end fund trades more like common stock than a mutual fund.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 14: Mutual Funds: An Easy Way to Diversify

An ETF provides similar services to an investor to those that a mutual fund investment provides.

Mutual funds give smaller investors the same ability to diversify and reduce risk as big investors with a great deal of money have.

Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund.

Bernie has followed the three steps to begin mutual fund investing and is ready to make the purchase.What are his choices in buying?

At the beginning of 2014,bond funds-including both municipal and taxable bond funds-made up the largest segment of the $279 billion closed-end fund market.

A sector fund is a mutual fund that tries to maximize the degree of diversification.

"Classes" of mutual funds have different fee arrangements attached to them.

For your investment program,you have occasionally been holding a few stocks that you purchased from various brokers.Based on this,which advantages of mutual funds would be appealing to you?

One of the most valuable mutual fund services available is automatic reinvestment of cash flows.

Former hedge fund manager Bernie Madoff ran a Ponzi scheme,in which he took money from new investors and used that money to pay earlier investors,all the while pocketing most of the money for himself.In the end,Madoff lost around ________ of his investors' money and ended up behind bars."

What does the following mathematical expression yield? (total market value of all securities - liabilities)divided by (total shares outstanding)=

You purchased 100 shares of a fund for $15.50 per share.Its current NAV is 20.75 per share.There were no distributions.What is your total return?

To obtain information about mutual funds you must always pay a fee.

What sources of information does Art Keown,your textbook author,recommend when researching mutual fund investing?

A bond mutual fund is an appropriate choice for an investor with an income goal.

One of the advantages of municipal bond funds is that

Investment companies are required by law to offer a prospectus to prospective investors.Let your instructor know which 5 parts you think are the most important and why.

Because mutual funds trade in such large quantities,they pay far more in terms of commissions.

By law,all mutual funds must be broadly diversified.

A closed-end fund trades more like common stock than a mutual fund.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters