Question 1

Which of the following types of funds tend to keep 25% of its assets in the securities of U.S.companies?

Accepted Answer

A) Emerging markets funds 
B) Single-country funds 
C) International funds 
D) Global funds 
A) Emerging markets funds 
B) Single-country funds 
C) International funds 
D) Global funds D

Question 2

A portfolio of directly-owned individual securities guided by an investment manager is known as a(n):

Accepted Answer

A) IRA. 
B) IMA. 
C) SMA. 
D) DCA. 
A) IRA. 
B) IMA. 
C) SMA. 
D) DCA. C

Question 3

What are the main differences between a closed-end and an open-end investment company?

Accepted Answer

A closed-end investment company has a fixed number of shares,and the price depends on supply and demand.An open-end fund's shares outstanding increase as long as new investors contribute money,and the price is the net asset value of the securities owned.

Question 4

An environmentally-friendly balanced mutual fund began the year with a net asset value (NAV)of $12.25 per share.During the year,it received $1.00 of dividend and interest income,$0.25 in realized capital gains,and $0.50 in unrealized capital gains.Ninety percent of the income and all of the realized capital gain were distributed to shareholders.Calculate the year-end NAV.

Accepted Answer

None

Question 5

You invested $10,000 10 years ago into Fly-By-Night Fund,which has reported performance (average annual total return)of 11.12% over this 10-year period.What would your ending wealth position be?

Accepted Answer

On a financial calculator:1000

Question 6

ETFs are managed investment portfolios that offer investors targeted diversification.

Accepted Answer

A) True 
 B)False

Question 7

You have a publication listing alternative growth funds with their most recent
12-month total returns.Is this a good predictor of future performance for the funds?

Accepted Answer

No.The best fund last year may or may no

Question 8

Index funds provide low-cost,passive investment exposure in a similar fashion to:

Accepted Answer

A) hybrid mutual funds. 
B) money market mutual funds. 
C) exchange-traded funds. 
D) equity income funds. 
A) hybrid mutual funds. 
B) money market mutual funds. 
C) exchange-traded funds. 
D) equity income funds.

Question 9

Which of the following is a major objective of unit investment trusts?

Accepted Answer

A) Capital preservation 
B) Capital gains 
C) Current income 
D) Tax deferment 
A) Capital preservation 
B) Capital gains 
C) Current income 
D) Tax deferment

Question 10

Which of the following is true regarding value funds and growth funds?

Accepted Answer

A) Value funds seek stocks that are cheap by fundamental standards while growth funds seek stocks with high current earnings. 
B) Growth funds typically outperform value funds. 
C) Value funds and growth funds tend to perform well at different times. 
D) Value funds typically have higher P/E ratios than growth funds. 
A) Value funds seek stocks that are cheap by fundamental standards while growth funds seek stocks with high current earnings. 
B) Growth funds typically outperform value funds. 
C) Value funds and growth funds tend to perform well at different times. 
D) Value funds typically have higher P/E ratios than growth funds.

Question 11

Would you recommend that a 65-year old retiree invest all of his/her retirement assets in an income fund?

Accepted Answer

No.The retiree should hold a d

Question 12

Does one mutual fund provide all the diversification that an investor needs?

Accepted Answer

A single fund typically has many (perhap

Question 13

On average,which type of mutual fund is expected to have the highest performance?

Accepted Answer

A) Money market funds 
B) Bond funds 
C) Equity funds 
D) Municipal bond funds 
A) Money market funds 
B) Bond funds 
C) Equity funds 
D) Municipal bond funds

Question 14

List the four distinct types of investment companies: ____________________,_____________________,_____________________,and _____________________.

Accepted Answer

UIT (unit investment trust),ET

Question 15

A 12b-1 fee is a:

Accepted Answer

A) redemption fee. 
B) sales charge. 
C) distribution fee. 
D) load fee. 
A) redemption fee. 
B) sales charge. 
C) distribution fee. 
D) load fee.

Question 16

For investors,ETFs generally offer greater tax efficiency than most mutual funds.

Accepted Answer

A) True 
 B)False

Question 17

Briefly explain the fees charged by mutual funds.

Accepted Answer

Load fees are sales charges,ma

Question 18

Unregulated companies that seek to exploit various market opportunities and require a substantial investment from investors are known as:

Accepted Answer

A) derivatives. 
B) options. 
C) hedge funds. 
D) MMFs. 
A) derivatives. 
B) options. 
C) hedge funds. 
D) MMFs.

Question 19

Global funds tend to hold a higher percentage of their portfolio in U.S.securities than do international funds.

Accepted Answer

A) True 
 B)False

Question 20

If NAV > market price of a fund,then the fund:

Accepted Answer

A) is selling at a discount. 
B) is selling at a premium. 
C) is an index fund. 
D) is an ETF. 
A) is selling at a discount. 
B) is selling at a premium. 
C) is an index fund. 
D) is an ETF.

Exam 3: Indirect Investing

Which of the following types of funds tend to keep 25% of its assets in the securities of U.S.companies?

A portfolio of directly-owned individual securities guided by an investment manager is known as a(n):

What are the main differences between a closed-end and an open-end investment company?

You invested $10,000 10 years ago into Fly-By-Night Fund,which has reported performance (average annual total return)of 11.12% over this 10-year period.What would your ending wealth position be?

ETFs are managed investment portfolios that offer investors targeted diversification.

You have a publication listing alternative growth funds with their most recent 12-month total returns.Is this a good predictor of future performance for the funds?

Index funds provide low-cost,passive investment exposure in a similar fashion to:

Which of the following is a major objective of unit investment trusts?

Which of the following is true regarding value funds and growth funds?

Would you recommend that a 65-year old retiree invest all of his/her retirement assets in an income fund?

Does one mutual fund provide all the diversification that an investor needs?

On average,which type of mutual fund is expected to have the highest performance?

List the four distinct types of investment companies: ____________________,_____________________,_____________________,and _____________________.

A 12b-1 fee is a:

For investors,ETFs generally offer greater tax efficiency than most mutual funds.

Briefly explain the fees charged by mutual funds.

Unregulated companies that seek to exploit various market opportunities and require a substantial investment from investors are known as:

Global funds tend to hold a higher percentage of their portfolio in U.S.securities than do international funds.

If NAV > market price of a fund,then the fund:

Understanding Investments

Investment Alternatives

Securities Markets and Market Indexes

How Securities Are Traded

The Risks and Returns From Investing

Portfolio Theory

Portfolio Selection

Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Economy Market Analysis

Industry Analysis

Company Analysis

Technical Analysis

Bond Yields

Bonds: Analysis and Strategy

Options

Futures

Portfolio Management

Evaluation of Investment Performance

Filters

List the four distinct types of investment companies: __________,_,_,and ___________.