Exam 15: Mutual Funds and Exchange Traded Funds

The commission for a mutual fund with a stated commission of 4.5 percent is actually ____ percent of the amount invested.

Purchasing a life-cycle fund is a "set-it-and-forget-it" approach to investing for retirement.

A small percentage of mutual fund investors take advantage of automatic reinvestment of the current income received from their mutual fund.

Which is not one of the major objectives of mutual funds?

When you sell your share in a mutual fund,you receive the NAV of the share at its current market price.

A beneficiary designation is automatically set up in a mutual fund account without having to complete any additional forms

Most mutual funds are

Which of the following types of investment companies operates much like an index fund?

Mutual fund shares are redeemed at their net asset value (NAV) at the end of the trading day.

The mutual fund offer price is the price at which a mutual fund's share can be purchased by investors.It equals the current NAV per share minus sales charges,if any.

A mutual fund that invests in a mix of assets (usually stocks,bonds,and cash equivalents and sometimes international assets,gold,and real estate),and they buy and sell regularly to reduce risk while trying to outperform the market is a(n)

The shares of an open-end mutual fund are sold at a discount from their net asset value.

"Fun" money is a sum of investment money that you can afford to lose without doing serious damage to your total portfolio.

Periodic,systematic investment in mutual funds is very much like ______ when buying stocks.

In general,____ charges are more costly in the short run,and ____ charges are more costly in the long run.

Some bond funds invest only in municipal bonds so the investor receives tax-free income.

A money market mutual funds include tax-exempt funds and government securities funds.

Sylvia owns 100 shares of Maxima Growth mutual fund.In December she received a check for $50,payment of ordinary income dividend distributions and capital gains distributions.Sylvia also noticed in her daily newspaper listings that Maxima Growth is now worth $2 per share more than what she purchased it for at the beginning of the year.How much will Sylvia's holdings in Maxima Growth add to her taxable income for the year assuming she decides not to sell the fund this year?

Selecting mutual funds in which to invest is an easy,do-it-yourself (DIY) effort for no-load investors.

A mutual fund can be arranged to keep its proceeds out of probate,in case of the owner's death.