Question 1

A redemption charge is designed to discourage frequent trading in and out of particular mutual funds.

Accepted Answer

A) True 
 B)False

Question 2

Compounding is attained in mutual fund investing through

Accepted Answer

A) frequent buying and selling of shares. 
B) minimizing account fees. 
C) using leverage. 
D) automatic reinvestment of dividends. 
A) frequent buying and selling of shares. 
B) minimizing account fees. 
C) using leverage. 
D) automatic reinvestment of dividends.

Question 3

Which type of fund would be most likely to invest in guaranteed investment contracts?

Accepted Answer

A) Sector fund 
B) Stable-value fund 
C) Index fund 
D) Growth and income fund 
A) Sector fund 
B) Stable-value fund 
C) Index fund 
D) Growth and income fund

Question 4

____ funds invest in high-yield,high-risk corporate bonds.

Accepted Answer

A) World bond 
B) Junk bond 
C) Mortgage-backed 
D) Long-term corporate bond 
A) World bond 
B) Junk bond 
C) Mortgage-backed 
D) Long-term corporate bond

Question 5

____ invest in highly liquid,relatively safe securities with very short maturities.

Accepted Answer

A) Exchange-traded funds 
B) Intermediate corporate bond funds 
C) Fixed-income funds 
D) Money market funds 
A) Exchange-traded funds 
B) Intermediate corporate bond funds 
C) Fixed-income funds 
D) Money market funds

Question 6

Mutual fund dividends are paid out of the profits a mutual fund earns on its investments.

Accepted Answer

A) True 
 B)False

Question 7

Which is not a method for taking your funds out of a mutual fund?

Accepted Answer

A) Borrowing against your fund account 
B) Taking a set dollar amount each month 
C) Cashing in a set number of shares each month 
D) Taking the current income as cash 
A) Borrowing against your fund account 
B) Taking a set dollar amount each month 
C) Cashing in a set number of shares each month 
D) Taking the current income as cash

Question 8

Mutual funds front-end loads are,in effect,trailing commissions.

Accepted Answer

A) True 
 B)False

Question 9

A mutual fund is an investment company that pools funds obtained by selling shares to investors and makes investments to achieve the financial goal of income or growth,or both.

Accepted Answer

A) True 
 B)False

Question 10

The collection of securities and other investments owned by a mutual fund is called a(n)

Accepted Answer

A) investment company. 
B) portfolio. 
C) mutual fund family. 
D) prospectus. 
A) investment company. 
B) portfolio. 
C) mutual fund family. 
D) prospectus.

Question 11

____ funds experience a high degree of share-price fluctuation.

Accepted Answer

A) Value 
B) Index 
C) Aggressive-growth 
D) Growth 
A) Value 
B) Index 
C) Aggressive-growth 
D) Growth

Question 12

Realized net capital gains that a mutual fund pays out to its investors are called ____ distributions.

Accepted Answer

A) ordinary income dividend 
B) interest 
C) capital gains 
D) rent 
A) ordinary income dividend 
B) interest 
C) capital gains 
D) rent

Question 13

The size of a mutual fund,in terms of its total assets,is a factor to consider when selecting a fund.

Accepted Answer

A) True 
 B)False

Question 14

A mutual fund that emphasizes well-balanced return of income and long-term capital gains is a ____ fund.

Accepted Answer

A) balanced 
B) growth 
C) current income 
D) long-term growth 
A) balanced 
B) growth 
C) current income 
D) long-term growth

Question 15

Index funds are

Accepted Answer

A) designed to beat the market. 
B) managed. 
C) unmanaged. 
D) focused on the money market. 
A) designed to beat the market. 
B) managed. 
C) unmanaged. 
D) focused on the money market.

Question 16

The fee that is assessed as a percent of the net asset value of a mutual fund account annually to pay for advertising,marketing,and distribution costs of the fund is called a

Accepted Answer

A) front-end load. 
B) 12b-1 fee. 
C) management fee. 
D) contingent deferred sales charge. 
A) front-end load. 
B) 12b-1 fee. 
C) management fee. 
D) contingent deferred sales charge.

Question 17

Which of the following is (are) a unique advantage(s) of investing in a family of funds?

Accepted Answer

A) Beneficiary designation 
B) Exchange privileges 
C) Automatic reinvestment 
D) Beneficiary designation and switching privileges 
A) Beneficiary designation 
B) Exchange privileges 
C) Automatic reinvestment 
D) Beneficiary designation and switching privileges

Question 18

As an owner of a mutual fund share,you receive your capital gains distributions when you sell your shares.

Accepted Answer

A) True 
 B)False

Question 19

Advantages of bond funds over individual bonds include all of the following except

Accepted Answer

A) Bond funds are more liquid because shares can be readily sold. 
B) Bond funds automatically reinvest interest and other income. 
C) Bond funds earn higher rates of return. 
D) Bond funds automatically reinvest interest and are more liquid. 
A) Bond funds are more liquid because shares can be readily sold. 
B) Bond funds automatically reinvest interest and other income. 
C) Bond funds earn higher rates of return. 
D) Bond funds automatically reinvest interest and are more liquid.

Question 20

A growing number of mutual fund companies now offer an option of A shares or B shares or C shares.Which of the following is true about the different classes?

Accepted Answer

A) Each class has a different fee structure. 
B) Each class has a different investment objective. 
C) Each fund has a different set of securities in its portfolio. 
D) After considering fees the share classes have essentially the same return for an investor. 
A) Each class has a different fee structure. 
B) Each class has a different investment objective. 
C) Each fund has a different set of securities in its portfolio. 
D) After considering fees the share classes have essentially the same return for an investor.

A redemption charge is designed to discourage frequent trading in and out of particular mutual funds.

Compounding is attained in mutual fund investing through

Which type of fund would be most likely to invest in guaranteed investment contracts?

____ funds invest in high-yield,high-risk corporate bonds.

____ invest in highly liquid,relatively safe securities with very short maturities.

Mutual fund dividends are paid out of the profits a mutual fund earns on its investments.

Which is not a method for taking your funds out of a mutual fund?

Mutual funds front-end loads are,in effect,trailing commissions.

A mutual fund is an investment company that pools funds obtained by selling shares to investors and makes investments to achieve the financial goal of income or growth,or both.

The collection of securities and other investments owned by a mutual fund is called a(n)

____ funds experience a high degree of share-price fluctuation.

Realized net capital gains that a mutual fund pays out to its investors are called ____ distributions.

The size of a mutual fund,in terms of its total assets,is a factor to consider when selecting a fund.

A mutual fund that emphasizes well-balanced return of income and long-term capital gains is a ____ fund.

Index funds are

The fee that is assessed as a percent of the net asset value of a mutual fund account annually to pay for advertising,marketing,and distribution costs of the fund is called a

Which of the following is (are) a unique advantage(s) of investing in a family of funds?

As an owner of a mutual fund share,you receive your capital gains distributions when you sell your shares.

Advantages of bond funds over individual bonds include all of the following except

A growing number of mutual fund companies now offer an option of A shares or B shares or C shares.Which of the following is true about the different classes?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Real Estate and High-Risk Investments

Retirement and Estate Planning

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Exam 15: Mutual Funds and Exchange Traded Funds

A redemption charge is designed to discourage frequent trading in and out of particular mutual funds.

Compounding is attained in mutual fund investing through

Which type of fund would be most likely to invest in guaranteed investment contracts?

____ funds invest in high-yield,high-risk corporate bonds.

____ invest in highly liquid,relatively safe securities with very short maturities.

Mutual fund dividends are paid out of the profits a mutual fund earns on its investments.

Which is not a method for taking your funds out of a mutual fund?

Mutual funds front-end loads are,in effect,trailing commissions.

A mutual fund is an investment company that pools funds obtained by selling shares to investors and makes investments to achieve the financial goal of income or growth,or both.

The collection of securities and other investments owned by a mutual fund is called a(n)

____ funds experience a high degree of share-price fluctuation.

Realized net capital gains that a mutual fund pays out to its investors are called ____ distributions.

The size of a mutual fund,in terms of its total assets,is a factor to consider when selecting a fund.

A mutual fund that emphasizes well-balanced return of income and long-term capital gains is a ____ fund.

Index funds are

The fee that is assessed as a percent of the net asset value of a mutual fund account annually to pay for advertising,marketing,and distribution costs of the fund is called a

Which of the following is (are) a unique advantage(s) of investing in a family of funds?

As an owner of a mutual fund share,you receive your capital gains distributions when you sell your shares.

Advantages of bond funds over individual bonds include all of the following except

A growing number of mutual fund companies now offer an option of A shares or B shares or C shares.Which of the following is true about the different classes?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters