Exam 3: Indirect Investing

Each investor in an investment company shares in the returns of the fund's portfolio and also shares in the cost of running the fund.

A major difference between a closed-end investment company and an open-end investment company is that:

Closed-end investment companies typically sell additional shares of their own stock every few years.

Survivorship bias occurs when mutual funds are merged or liquidated,and only the performance of the surviving funds is reported.

Approximately 85 percent of money market assets are in non-taxable funds.

Which of the following is not one of the features of exchange traded funds (ETFs)?

Under the Morningstar rating system,one class of mutual fund shares can have a different rating than another share class of the same mutual fund.

Which brokerage firm was charged in 2004 with allowing late trading of mutual funds for some of its clients?

The 2 largest fund supermarkets are:

To qualify as a regulated investment company,a fund must distribute at least 50 percent of its taxable income to the shareholders.

Hedge funds typically require a large initial investment and may have restrictions on how quickly investors can withdraw their funds.

Which of the following is not true regarding money market funds?

The net asset value of a mutual fund does not consider unrealized capital gains.

In the mutual fund industry,the most common performance measure is a hypothetical rate of return that assumes performance is constant over the entire period and is known as the:

Three common costs incurred by Class A shares are: ______________________, ________________________,and ________________________.

Which of the following is not a characteristic of investments companies?