Question 1

Compared with open-end funds, closed-end funds

Accepted Answer

A)  Tend to invest in less liquid assets 
B)  Tend to invest in foreign assets 
C)  Tend to invest in Treasury securities 
D)  Are actively managed to seek a target return 
A)  Tend to invest in less liquid assets 
B)  Tend to invest in foreign assets 
C)  Tend to invest in Treasury securities 
D)  Are actively managed to seek a target return A

Question 2

Mutual funds initially took the form of

Accepted Answer

A)  Money market funds 
B)  Equity funds 
C)  Corporate bond funds 
D)  None of the above 
A)  Money market funds 
B)  Equity funds 
C)  Corporate bond funds 
D)  None of the above B

Question 3

With a closed-end mutual fund

Accepted Answer

A)  The number of shares expands and contracts with investor demand 
B)  The number of shares is fixed and the price per share rises and falls with investor demand 
C)  The composition of the fund's portfolio is constantly changing 
D)  They are no longer permitted in the United States 
A)  The number of shares expands and contracts with investor demand 
B)  The number of shares is fixed and the price per share rises and falls with investor demand 
C)  The composition of the fund's portfolio is constantly changing 
D)  They are no longer permitted in the United States B

Question 4

Target funds

Accepted Answer

A)  Focus on specific sectors of the economy 
B)  Are aimed at investors planning for retirement in the target year 
C)  Avoid SEC regulation 
D)  Focus on maximum diversification 
A)  Focus on specific sectors of the economy 
B)  Are aimed at investors planning for retirement in the target year 
C)  Avoid SEC regulation 
D)  Focus on maximum diversification

Question 5

"Breaking the buck" refers to

Accepted Answer

A)  A drop in the price of shares in an equity fund 
B)  A drop in the price of shares in a bond fund 
C)  The price of a share in a money fund dropping below one dollar 
D)  The failure of a mutual fund complex 
A)  A drop in the price of shares in an equity fund 
B)  A drop in the price of shares in a bond fund 
C)  The price of a share in a money fund dropping below one dollar 
D)  The failure of a mutual fund complex

Question 6

Investors favor exchange-traded funds (ETFs) over open-end funds because

Accepted Answer

A)  The way in which shares are priced is more transparent 
B)  There is more variety of investments 
C)  Trades can be completed any time during the business day instead of only at the end of the day 
D)  They are more fashionable these days 
A)  The way in which shares are priced is more transparent 
B)  There is more variety of investments 
C)  Trades can be completed any time during the business day instead of only at the end of the day 
D)  They are more fashionable these days

Question 7

Net asset value represents

Accepted Answer

A)  The price an investor in open funds receives for shares sold or pays for shares bought 
B)  The price paid or received on an ETF 
C)  The notional price of a share in an open-end fund that is tracked during the day 
D)  The base for determining the compensation of investment managers 
A)  The price an investor in open funds receives for shares sold or pays for shares bought 
B)  The price paid or received on an ETF 
C)  The notional price of a share in an open-end fund that is tracked during the day 
D)  The base for determining the compensation of investment managers

Question 8

An investor seeking a high degree of diversification would tend to select

Accepted Answer

A)  Money market mutual funds 
B)  Stock index funds 
C)  Sector funds 
D)  Hybrid funds 
A)  Money market mutual funds 
B)  Stock index funds 
C)  Sector funds 
D)  Hybrid funds

Question 9

Investors have sought mutual funds primarily for

Accepted Answer

A)  Achieving diversification 
B)  Achieving higher yield 
C)  Convenient access to their funds 
D)  Safety of their investments 
A)  Achieving diversification 
B)  Achieving higher yield 
C)  Convenient access to their funds 
D)  Safety of their investments

Question 10

Shares in money market mutual funds are priced on the basis of

Accepted Answer

A)  Net asset value 
B)  Amortized cost 
C)  Real-time values 
D)  The yield on 91-day Treasury bills 
A)  Net asset value 
B)  Amortized cost 
C)  Real-time values 
D)  The yield on 91-day Treasury bills

Question 11

Mutual funds got their start in

Accepted Answer

A)  The United Kingdom 
B)  Japan 
C)  Brazil 
D)  The United States 
A)  The United Kingdom 
B)  Japan 
C)  Brazil 
D)  The United States

Compared with open-end funds, closed-end funds

Mutual funds initially took the form of

With a closed-end mutual fund

Target funds

"Breaking the buck" refers to

Investors favor exchange-traded funds (ETFs) over open-end funds because

Net asset value represents

An investor seeking a high degree of diversification would tend to select

Investors have sought mutual funds primarily for

Shares in money market mutual funds are priced on the basis of

Mutual funds got their start in

Introduction

Overview of the Financial System

The Special Role of Commercial Banks

Factors Affecting Yields

Principles of Portfolio Selection and Efficient Markets

The Money Market

The Bond Market

Securitization

The Mortgage Market

The Equity Market

Central Banking and the Federal Reserve

Monetary Policy: The Basics

Monetary Policy: Challenges Faced by Policymakers

Financial Crises

The Foreign Exchange Market and Exchange Rate Regimes

Depository Institutions

The Pricing of Financial Assets

Hedge, Venture Capital, and Private Equity Funds

Large Institutional Investors

Filters

Exam 18: Mutual Funds

Compared with open-end funds, closed-end funds

Mutual funds initially took the form of

With a closed-end mutual fund

Target funds

"Breaking the buck" refers to

Investors favor exchange-traded funds (ETFs) over open-end funds because

Net asset value represents

An investor seeking a high degree of diversification would tend to select

Investors have sought mutual funds primarily for

Shares in money market mutual funds are priced on the basis of

Mutual funds got their start in

Introduction

Overview of the Financial System

The Special Role of Commercial Banks

Factors Affecting Yields

Principles of Portfolio Selection and Efficient Markets

The Money Market

The Bond Market

Securitization

The Mortgage Market

The Equity Market

Central Banking and the Federal Reserve

Monetary Policy: The Basics

Monetary Policy: Challenges Faced by Policymakers

Financial Crises

The Foreign Exchange Market and Exchange Rate Regimes

Depository Institutions

The Pricing of Financial Assets

Hedge, Venture Capital, and Private Equity Funds

Large Institutional Investors

Filters