Question 1

A mutual fund's ______ can allow investors to have amounts as low $25 per month transferred from their bank account to purchase shares.

Accepted Answer

A) automatic investment program 
B) exchange privilege 
C) systematic withdrawal plan 
D) beneficiary designation 
A) automatic investment program 
B) exchange privilege 
C) systematic withdrawal plan 
D) beneficiary designation

Question 2

Investing in a mutual fund rather than an individual stock reduces market risk.

Accepted Answer

A) True 
 B)False

Question 3

Publications that offer comparative performance information about mutual funds generally rank each fund according to one-year and ten-year performance only.

Accepted Answer

A) True 
 B)False

Question 4

Net asset value of a mutual fund is the price one pays (excluding any transaction costs) to buy a share of a mutual fund.

Accepted Answer

A) True 
 B)False

Question 5

The return on an index fund is expected to exceed the market average.

Accepted Answer

A) True 
 B)False

Question 6

Up-to-date comparative data on mutual funds is readily available on-line.

Accepted Answer

A) True 
 B)False

Question 7

When a mutual fund has more than one class (A,B,C,for example) it means that each class has a different group of securities in its investment portfolio.

Accepted Answer

A) True 
 B)False

Question 8

A(n) ____ is a closed-end investment company that makes a one-time public offering of only a specific,fixed number of units of investments in bonds.

Accepted Answer

A) unit investment trust 
B) REIT 
C) exchange-traded fund 
D) fixed-term fund 
A) unit investment trust 
B) REIT 
C) exchange-traded fund 
D) fixed-term fund

Question 9

You can make sure that your mutual fund account passes to your desired heir by completing a ________ when you open your account.

Accepted Answer

A) switching privilege 
B) systematic pass through 
C) open-end designation 
D) beneficiary designation 
A) switching privilege 
B) systematic pass through 
C) open-end designation 
D) beneficiary designation

Question 10

A beneficiary designation enables the shareholder to name one or more beneficiaries so that at the shareholder's death the proceeds go to the beneficiaries after going through probate.

Accepted Answer

A) True 
 B)False

Question 11

Investing in mutual funds that are part of the same family of funds can simplify one's finances.

Accepted Answer

A) True 
 B)False

Question 12

Closed-end investment companies

Accepted Answer

A) are the most common type of investment companies. 
B) issue a limited and fixed number of shares. 
C) redeem their shares directly from investors. 
D) buy and sell shares at net asset value. 
A) are the most common type of investment companies. 
B) issue a limited and fixed number of shares. 
C) redeem their shares directly from investors. 
D) buy and sell shares at net asset value.

Question 13

Open-end mutual fund shares have good liquidity because

Accepted Answer

A) they act very much like a bank account. 
B) the fund company will buy back the shares whenever requested. 
C) there are no redemption fees. 
D) you can always find another investor willing to purchase your shares. 
A) they act very much like a bank account. 
B) the fund company will buy back the shares whenever requested. 
C) there are no redemption fees. 
D) you can always find another investor willing to purchase your shares.

Question 14

A REIT is a type of closed-end mutual fund that focuses on

Accepted Answer

A) high real returns on investment for shareholders. 
B) regular earnings. 
C) real estate. 
D) rollover equities. 
A) high real returns on investment for shareholders. 
B) regular earnings. 
C) real estate. 
D) rollover equities.

Question 15

Front-end loads typically amount to 3 to 8.5 percent of the amount invested.

Accepted Answer

A) True 
 B)False

Question 16

Individuals trade closed-end fund shares much like the common stock of a corporation.

Accepted Answer

A) True 
 B)False

Question 17

Mutual fund investors must pay federal income taxes on

Accepted Answer

A) ordinary income dividend distributions. 
B) capital gains distributions. 
C) capital gains from selling their shares. 
D) (all of these) 
A) ordinary income dividend distributions. 
B) capital gains distributions. 
C) capital gains from selling their shares. 
D) (all of these)

Question 18

Automatic dividend reinvestment

Accepted Answer

A) is a requirement of all mutual fund companies. 
B) compounds share ownership. 
C) allows one to defer taxes on this income. 
D) reduces investment yields. 
A) is a requirement of all mutual fund companies. 
B) compounds share ownership. 
C) allows one to defer taxes on this income. 
D) reduces investment yields.

Question 19

Compute the net asset value for a share of a mutual fund with the following characteristics:
​
Market value of assets:
$177,000,000
Market value of liabilities:
$12,000,000
Number of shares outstanding:
7,250,000

Accepted Answer

A) $23.66 
B) $22.76 
C) $26.07 
D) $24.41 
A) $23.66 
B) $22.76 
C) $26.07 
D) $24.41

Question 20

A single mutual fund company offers only one class of load shares to investors,such as A,B,or C.

Accepted Answer

A) True 
 B)False

A mutual fund's ______ can allow investors to have amounts as low $25 per month transferred from their bank account to purchase shares.

Investing in a mutual fund rather than an individual stock reduces market risk.

Publications that offer comparative performance information about mutual funds generally rank each fund according to one-year and ten-year performance only.

Net asset value of a mutual fund is the price one pays (excluding any transaction costs) to buy a share of a mutual fund.

The return on an index fund is expected to exceed the market average.

Up-to-date comparative data on mutual funds is readily available on-line.

When a mutual fund has more than one class (A,B,C,for example) it means that each class has a different group of securities in its investment portfolio.

A(n) ____ is a closed-end investment company that makes a one-time public offering of only a specific,fixed number of units of investments in bonds.

You can make sure that your mutual fund account passes to your desired heir by completing a ________ when you open your account.

A beneficiary designation enables the shareholder to name one or more beneficiaries so that at the shareholder's death the proceeds go to the beneficiaries after going through probate.

Investing in mutual funds that are part of the same family of funds can simplify one's finances.

Closed-end investment companies

Open-end mutual fund shares have good liquidity because

A REIT is a type of closed-end mutual fund that focuses on

Front-end loads typically amount to 3 to 8.5 percent of the amount invested.

Individuals trade closed-end fund shares much like the common stock of a corporation.

Mutual fund investors must pay federal income taxes on

Automatic dividend reinvestment

Compute the net asset value for a share of a mutual fund with the following characteristics: Market value of assets: $177,000,000 Market value of liabilities: $12,000,000 Number of shares outstanding: 7,250,000

A single mutual fund company offers only one class of load shares to investors,such as A,B,or C.

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

Exam 15: Mutual Funds and Exchange Traded Funds

A mutual fund's ______ can allow investors to have amounts as low $25 per month transferred from their bank account to purchase shares.

Investing in a mutual fund rather than an individual stock reduces market risk.

Publications that offer comparative performance information about mutual funds generally rank each fund according to one-year and ten-year performance only.

Net asset value of a mutual fund is the price one pays (excluding any transaction costs) to buy a share of a mutual fund.

The return on an index fund is expected to exceed the market average.

Up-to-date comparative data on mutual funds is readily available on-line.

When a mutual fund has more than one class (A,B,C,for example) it means that each class has a different group of securities in its investment portfolio.

A(n) ____ is a closed-end investment company that makes a one-time public offering of only a specific,fixed number of units of investments in bonds.

You can make sure that your mutual fund account passes to your desired heir by completing a ________ when you open your account.

A beneficiary designation enables the shareholder to name one or more beneficiaries so that at the shareholder's death the proceeds go to the beneficiaries after going through probate.

Investing in mutual funds that are part of the same family of funds can simplify one's finances.

Closed-end investment companies

Open-end mutual fund shares have good liquidity because

A REIT is a type of closed-end mutual fund that focuses on

Front-end loads typically amount to 3 to 8.5 percent of the amount invested.

Individuals trade closed-end fund shares much like the common stock of a corporation.

Mutual fund investors must pay federal income taxes on

Automatic dividend reinvestment

Compute the net asset value for a share of a mutual fund with the following characteristics: ​ Market value of assets: $177,000,000 Market value of liabilities: $12,000,000 Number of shares outstanding: 7,250,000

A single mutual fund company offers only one class of load shares to investors,such as A,B,or C.

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

Compute the net asset value for a share of a mutual fund with the following characteristics: Market value of assets: $177,000,000 Market value of liabilities: $12,000,000 Number of shares outstanding: 7,250,000