Question 1

A mutual fund that invests in common stocks and bonds with the primary objective of earning tax-advantaged income is called a(n) ____________ fund.

Accepted Answer

A) balanced 
B) capital growth 
C) dividend 
D) income 
E) money market 
A) balanced 
B) capital growth 
C) dividend 
D) income 
E) money market

Question 2

What type of fund seeks to aim for safety of principal and income but are subject to capital gains and losses, which have tax implications?

Accepted Answer

A) Money market 
B) Mortgage 
C) Bond 
D) Dividend 
E) Balanced 
A) Money market 
B) Mortgage 
C) Bond 
D) Dividend 
E) Balanced

Question 3

A mutual fund that requires investors to make regular purchases over a specified period of time is called a

Accepted Answer

A) regular account. 
B) voluntary savings plan. 
C) contractual savings plan. 
D) minimum withdrawal plan. 
E) free contract plan. 
A) regular account. 
B) voluntary savings plan. 
C) contractual savings plan. 
D) minimum withdrawal plan. 
E) free contract plan.

Question 4

Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio.

Accepted Answer

A) True 
 B)False

Question 5

The least liquid of all the types of mutual funds is __________________

Accepted Answer

A) a balanced asset allocation fund 
B) a money market fund 
C) an equity or common stock fund 
D) a real estate mutual fund 
E) an ethical fund 
A) a balanced asset allocation fund 
B) a money market fund 
C) an equity or common stock fund 
D) a real estate mutual fund 
E) an ethical fund

Question 6

While mutual fund income dividends are subject to taxation, capital gain distributions are not subject to taxation.

Accepted Answer

A) True 
 B)False

Question 7

Index funds are bought at beginning-of-day prices.

Accepted Answer

A) True 
 B)False

Question 8

For most mutual funds, the net asset value is calculated:

Accepted Answer

A) daily. 
B) quarterly. 
C) weekly. 
D) yearly. 
E) whenever an investor calls and requests a price quote. 
A) daily. 
B) quarterly. 
C) weekly. 
D) yearly. 
E) whenever an investor calls and requests a price quote.

Question 9

Which of the following statements is false?

Accepted Answer

A) Investors purchase mutual funds for diversification. 
B) Investors purchase mutual funds because of professional management. 
C) Investors who purchase mutual funds are guaranteed a higher rate of return than a comparable investment in stocks or bonds. 
D) Professional mutual fund managers work for an investment company. 
E) Even the best portfolio managers sometimes make mistakes. 
A) Investors purchase mutual funds for diversification. 
B) Investors purchase mutual funds because of professional management. 
C) Investors who purchase mutual funds are guaranteed a higher rate of return than a comparable investment in stocks or bonds. 
D) Professional mutual fund managers work for an investment company. 
E) Even the best portfolio managers sometimes make mistakes.

Question 10

When one investment company manages a group of mutual funds, it is called a(n):

Accepted Answer

A) exchange fund. 
B) family of funds. 
C) diversification fund. 
D) versatility fund. 
E) group of funds. 
A) exchange fund. 
B) family of funds. 
C) diversification fund. 
D) versatility fund. 
E) group of funds.

Question 11

What type of fund seeks to aim to provide a mixture of safety, income, and capital appreciation?

Accepted Answer

A) Money market 
B) Mortgage 
C) Bond 
D) Dividend 
E) Balanced 
A) Money market 
B) Mortgage 
C) Bond 
D) Dividend 
E) Balanced

Question 12

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

Accepted Answer

A) True 
 B)False

Question 13

An investment company sponsoring a mutual fund must give potential investors a

Accepted Answer

A) analytical purchase report. 
B) prospectus. 
C) disclosure/evaluation form. 
D) redemption fee sheet. 
E) copy of the annual mutual funds evaluation provided by Changing Times magazine. 
A) analytical purchase report. 
B) prospectus. 
C) disclosure/evaluation form. 
D) redemption fee sheet. 
E) copy of the annual mutual funds evaluation provided by Changing Times magazine.

Question 14

Morgan Phelps just purchased 200 shares in the Green Fidelity Fund.The purchase cost for each share was $40.If this fund charges a 6 percent load, what is the total amount of commission he will pay the investment company?

Accepted Answer

A) $200 
B) $240 
C) $400 
D) $480 
E) No commission is charged 
A) $200 
B) $240 
C) $400 
D) $480 
E) No commission is charged

Question 15

Shares in a close-end fund are redeemed by the investment company at the request of the investor.

Accepted Answer

A) True 
 B)False

Question 16

In an open-end fund, investors pay a commission (as high as 8.5 percent) every time they purchase or sell shares.

Accepted Answer

A) True 
 B)False

Question 17

What is step 5 of the common steps used by investors to evaluate mutual funds?

Accepted Answer

A) Perform a financial checkup to make sure you are ready to invest. 
B) Obtain the money you need to purchase mutual funds. 
C) Determine your investment objectives. 
D) Find a fund with an objective that matches your objective. 
E) Evaluate, evaluate, and evaluate any mutual fund before buying or selling. 
A) Perform a financial checkup to make sure you are ready to invest. 
B) Obtain the money you need to purchase mutual funds. 
C) Determine your investment objectives. 
D) Find a fund with an objective that matches your objective. 
E) Evaluate, evaluate, and evaluate any mutual fund before buying or selling.

Question 18

The diversification of mutual funds spells safety, because an occasional loss incurred with one investment is usually offset by gains from other investments.

Accepted Answer

A) True 
 B)False

Question 19

What types of mutual funds are the most popular in Canada as of May 2017?

Accepted Answer

A) Balanced 
B) Equity 
C) Specialty 
D) Bond 
E) Short-term 
A) Balanced 
B) Equity 
C) Specialty 
D) Bond 
E) Short-term

Question 20

A closed-end fund is a mutual fund in which shares are issued only when the fund is organized.

Accepted Answer

A) True 
 B)False

A mutual fund that invests in common stocks and bonds with the primary objective of earning tax-advantaged income is called a(n) ____________ fund.

What type of fund seeks to aim for safety of principal and income but are subject to capital gains and losses, which have tax implications?

A mutual fund that requires investors to make regular purchases over a specified period of time is called a

Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio.

The least liquid of all the types of mutual funds is __________________

While mutual fund income dividends are subject to taxation, capital gain distributions are not subject to taxation.

Index funds are bought at beginning-of-day prices.

For most mutual funds, the net asset value is calculated:

Which of the following statements is false?

When one investment company manages a group of mutual funds, it is called a(n):

What type of fund seeks to aim to provide a mixture of safety, income, and capital appreciation?

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

An investment company sponsoring a mutual fund must give potential investors a

Morgan Phelps just purchased 200 shares in the Green Fidelity Fund.The purchase cost for each share was $40.If this fund charges a 6 percent load, what is the total amount of commission he will pay the investment company?

Shares in a close-end fund are redeemed by the investment company at the request of the investor.

In an open-end fund, investors pay a commission (as high as 8.5 percent) every time they purchase or sell shares.

What is step 5 of the common steps used by investors to evaluate mutual funds?

The diversification of mutual funds spells safety, because an occasional loss incurred with one investment is usually offset by gains from other investments.

What types of mutual funds are the most popular in Canada as of May 2017?

A closed-end fund is a mutual fund in which shares are issued only when the fund is organized.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

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Exam 13: Investing in Mutual Funds

A mutual fund that invests in common stocks and bonds with the primary objective of earning tax-advantaged income is called a(n) ____________ fund.

What type of fund seeks to aim for safety of principal and income but are subject to capital gains and losses, which have tax implications?

A mutual fund that requires investors to make regular purchases over a specified period of time is called a

Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio.

The least liquid of all the types of mutual funds is __________________

While mutual fund income dividends are subject to taxation, capital gain distributions are not subject to taxation.

Index funds are bought at beginning-of-day prices.

For most mutual funds, the net asset value is calculated:

Which of the following statements is false?

When one investment company manages a group of mutual funds, it is called a(n):

What type of fund seeks to aim to provide a mixture of safety, income, and capital appreciation?

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

An investment company sponsoring a mutual fund must give potential investors a

Morgan Phelps just purchased 200 shares in the Green Fidelity Fund.The purchase cost for each share was $40.If this fund charges a 6 percent load, what is the total amount of commission he will pay the investment company?

Shares in a close-end fund are redeemed by the investment company at the request of the investor.

In an open-end fund, investors pay a commission (as high as 8.5 percent) every time they purchase or sell shares.

What is step 5 of the common steps used by investors to evaluate mutual funds?

The diversification of mutual funds spells safety, because an occasional loss incurred with one investment is usually offset by gains from other investments.

What types of mutual funds are the most popular in Canada as of May 2017?

A closed-end fund is a mutual fund in which shares are issued only when the fund is organized.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Retirement Planning

Estate Planning

Filters