Question 1

Which of the following ETFs (exchange traded funds)provides exposure to 500 U.S.large-capitalization companies?

Accepted Answer

A) Spider 
B) Clubs 
C) Cubes 
D) Diamonds 
A) Spider 
B) Clubs 
C) Cubes 
D) Diamonds

Question 2

A group of mutual funds with a common management are known as:

Accepted Answer

A) fund syndicates. 
B) fund conglomerates. 
C) fund families. 
D) fund complexes. 
A) fund syndicates. 
B) fund conglomerates. 
C) fund families. 
D) fund complexes.

Question 3

Single-country funds have traditionally:

Accepted Answer

A) outperformed international funds. 
B) underperformed international funds. 
C) been open-end. 
D) been closed-end. 
A) outperformed international funds. 
B) underperformed international funds. 
C) been open-end. 
D) been closed-end.

Question 4

Which of the following statements concerning the trend in investment company growth is true?

Accepted Answer

A) The recent trend shows more growth in closed-end investment companies. 
B) The recent trend shows more growth in unit investment trusts. 
C) The recent trend shows more growth in open-end investment companies. 
D) The recent trend shows more growth in exchange traded funds. 
A) The recent trend shows more growth in closed-end investment companies. 
B) The recent trend shows more growth in unit investment trusts. 
C) The recent trend shows more growth in open-end investment companies. 
D) The recent trend shows more growth in exchange traded funds.

Question 5

No-load funds charge a one-time expense fee to cover all operating expenses.

Accepted Answer

A) True 
 B)False

Question 6

If a mutual fund holds a substantial amount of Treasury bills,it is probably a:

Accepted Answer

A) tax-exempt fund. 
B) conservative bond fund. 
C) bond income fund. 
D) money market mutual fund. 
A) tax-exempt fund. 
B) conservative bond fund. 
C) bond income fund. 
D) money market mutual fund.

Question 7

You would expect a value fund to buy stock based on a sound earnings record while growth funds might invest in companies with no earnings record at all.

Accepted Answer

A) True 
 B)False

Question 8

Load funds generally outperform no-load funds.

Accepted Answer

A) True 
 B)False

Question 9

The most popular type of investment company is a:

Accepted Answer

A) unit investment trust. 
B) mutual fund. 
C) closed-end investment company. 
D) real estate investment trust. 
A) unit investment trust. 
B) mutual fund. 
C) closed-end investment company. 
D) real estate investment trust.

Question 10

Investment companies must register with the SEC under the provisions of the:

Accepted Answer

A) Securities Act of 1933. 
B) Securities Exchange Act of 1934. 
C) Maloney Act of 1938. 
D) Investment Company Act of 1940. 
A) Securities Act of 1933. 
B) Securities Exchange Act of 1934. 
C) Maloney Act of 1938. 
D) Investment Company Act of 1940.

Question 11

What is the difference between the insurance offered by the Securities Investor Protection Corporation (SIPC)and that offered by the Federal Deposit Insurance Corporation (FDIC)?

Accepted Answer

The FDIC insures accounts at b

Question 12

Net asset value takes into account:

Accepted Answer

A) both realized and unrealized capital gains. 
B) only realized capital gains. 
C) only unrealized capital gains. 
D) neither realized or unrealized capital gains. 
A) both realized and unrealized capital gains. 
B) only realized capital gains. 
C) only unrealized capital gains. 
D) neither realized or unrealized capital gains.

Question 13

Would one expect to find higher P/E ratios in an aggressive growth fund or in growth and income fund?

Accepted Answer

One would expect higher P/Es i

Question 14

Index funds tend to have lower expenses than other funds because they do not incur the costs of professional portfolio management.

Accepted Answer

A) True 
 B)False

Question 15

Is an investor able to achieve significant diversification by purchasing a single-country fund?

Accepted Answer

The fund itself might be well diversifie

Question 16

Under the Securities Act of 1933,investment companies are required to register with the SEC.

Accepted Answer

A) True 
 B)False

Question 17

A 12b-1 fee is used to cover a fund's cost of distribution.

Accepted Answer

A) True 
 B)False

Question 18

No-load funds sell:

Accepted Answer

A) at net asset value. 
B) below net asset value. 
C) above net asset value. 
D) at a discount. 
A) at net asset value. 
B) below net asset value. 
C) above net asset value. 
D) at a discount.

Question 19

Buying shares of a mutual fund is an example of indirect investing.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements regarding mutual funds is true?

Accepted Answer

A) Higher-performing funds generally have higher expenses. 
B) Stock funds generally have higher expenses than bond funds. 
C) Index funds generally have higher expenses than non-index funds. 
D) Lower performing funds generally have higher expenses. 
A) Higher-performing funds generally have higher expenses. 
B) Stock funds generally have higher expenses than bond funds. 
C) Index funds generally have higher expenses than non-index funds. 
D) Lower performing funds generally have higher expenses.

Exam 3: Indirect Investing

Which of the following ETFs (exchange traded funds)provides exposure to 500 U.S.large-capitalization companies?

A group of mutual funds with a common management are known as:

Single-country funds have traditionally:

Which of the following statements concerning the trend in investment company growth is true?

No-load funds charge a one-time expense fee to cover all operating expenses.

If a mutual fund holds a substantial amount of Treasury bills,it is probably a:

You would expect a value fund to buy stock based on a sound earnings record while growth funds might invest in companies with no earnings record at all.

Load funds generally outperform no-load funds.

The most popular type of investment company is a:

Investment companies must register with the SEC under the provisions of the:

What is the difference between the insurance offered by the Securities Investor Protection Corporation (SIPC)and that offered by the Federal Deposit Insurance Corporation (FDIC)?

Net asset value takes into account:

Would one expect to find higher P/E ratios in an aggressive growth fund or in growth and income fund?

Index funds tend to have lower expenses than other funds because they do not incur the costs of professional portfolio management.

Is an investor able to achieve significant diversification by purchasing a single-country fund?

Under the Securities Act of 1933,investment companies are required to register with the SEC.

A 12b-1 fee is used to cover a fund's cost of distribution.

No-load funds sell:

Buying shares of a mutual fund is an example of indirect investing.

Which of the following statements regarding mutual funds is true?

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