Question 1

To purchase shares in an open-end fund, you may use four options: regular accounts, voluntary savings plans, contractual savings plans and reinvestment plans.

Accepted Answer

A) True 
 B)False

Question 2

For a mutual fund, the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

Accepted Answer

A) True 
 B)False

Question 3

What type of fund sacrifices diversification in an effort to build capital gains?

Accepted Answer

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

Question 4

Typically, you must invest at least $250 to open a mutual fund account.

Accepted Answer

A) True 
 B)False

Question 5

An individual who helps investors decide when to switch their investment from one fund to another fund is called a(n)

Accepted Answer

A) financial planner 
B) fund evaluator. 
C) opportunity timer. 
D) market timer. 
E) fund consultant. 
A) financial planner 
B) fund evaluator. 
C) opportunity timer. 
D) market timer. 
E) fund consultant.

Question 6

The net asset value per mutual fund share is the current market value of the securities contained in the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 7

A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n) ____________ fund.

Accepted Answer

A) balanced 
B) growth 
C) income 
D) equity 
E) money market 
A) balanced 
B) growth 
C) income 
D) equity 
E) money market

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The Sage Mutual Fund's portfolio is valued at $120 million.The fund has liabilities of $10 million, and the investment company sponsoring the fund has issued 5,000,000 shares.What is the fund's net asset value per share?

Accepted Answer

A) $2.00 
B) $5.00 
C) $12.00 
D) $22.00 
E) $24.00 
A) $2.00 
B) $5.00 
C) $12.00 
D) $22.00 
E) $24.00

Question 10

Even though they are under professional management, the individual investor to should evaluate a mutual fund investment.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following factors would not affect the relationship between an individual's investment goals and the goals of a mutual fund?

Accepted Answer

A) the investor's age 
B) the investor's family situation 
C) the investor's income 
D) the investor's future earning power 
E) the investor's age, the investor's family situation, the investor's income, and the investor's future earning power would affect the relationship between an investor's investment goals and the goals of a mutual fund. 
A) the investor's age 
B) the investor's family situation 
C) the investor's income 
D) the investor's future earning power 
E) the investor's age, the investor's family situation, the investor's income, and the investor's future earning power would affect the relationship between an investor's investment goals and the goals of a mutual fund.

Question 12

What type of fund seeks to aim for tax-advantaged income with some possibility of capital growth?

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 13

Which of the following is not a withdrawal option for a mutual fund?

Accepted Answer

A) The investor may withdraw a specified, dollar amount each investment period. 
B) The investor may liquidate or "sell off" a certain number of shares each investment period. 
C) The investor can withdraw a fixed percentage of asset growth. 
D) The investor can withdraw all income that results from interest, dividends, and capital gains earned by the mutual fund during an investment period. 
E) The investor must wait five years, and then can withdraw 10 percent of the asset growth each year until the fund is exhausted. 
A) The investor may withdraw a specified, dollar amount each investment period. 
B) The investor may liquidate or "sell off" a certain number of shares each investment period. 
C) The investor can withdraw a fixed percentage of asset growth. 
D) The investor can withdraw all income that results from interest, dividends, and capital gains earned by the mutual fund during an investment period. 
E) The investor must wait five years, and then can withdraw 10 percent of the asset growth each year until the fund is exhausted.

Question 14

In a newspaper quotation, which of the following letters would indicate if a mutual fund is a no load fund?

Accepted Answer

A) N 
B) R 
C) FR 
D) B 
E) It is impossible to tell if a mutual fund is a no load fund by looking in the newspaper. 
A) N 
B) R 
C) FR 
D) B 
E) It is impossible to tell if a mutual fund is a no load fund by looking in the newspaper.

Question 15

Which of the following statements is false?

Accepted Answer

A) The responsibility for choosing the right mutual fund rests with the individual investor. 
B) Professional fund managers do make mistakes. 
C) Although investing in mutual funds provides professional management, individual investors should continually evaluate their mutual fund investments. 
D) There is no need to evaluate mutual fund investments because investment companies hire the best professional managers they can to manage their funds. 
E) Individual investors should be involved in choosing a mutual fund because they know how the objectives of a mutual fund match their own investment objectives. 
A) The responsibility for choosing the right mutual fund rests with the individual investor. 
B) Professional fund managers do make mistakes. 
C) Although investing in mutual funds provides professional management, individual investors should continually evaluate their mutual fund investments. 
D) There is no need to evaluate mutual fund investments because investment companies hire the best professional managers they can to manage their funds. 
E) Individual investors should be involved in choosing a mutual fund because they know how the objectives of a mutual fund match their own investment objectives.

Question 16

What type of fee is charged with each purchase?

Accepted Answer

A) Load fund 
B) No-load fund 
C) Front-end load 
D) Back-end load 
E) Management fee 
A) Load fund 
B) No-load fund 
C) Front-end load 
D) Back-end load 
E) Management fee

Question 17

What type of fund seeks to achieve a high level of income and liquidity through investment in short-term money market instruments, such as T-bills, commercial paper, and short-term government bonds?

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 18

Anne Lily purchased 260 shares of the New Sage Growth Fund.The net asset value for each share at the time of purchase was $19.If this fund charges a 4.5 percent load, what is the commission amount she will pay the investment company?

Accepted Answer

A) $19.00 
B) $222.30 
C) $500.00 
D) $1170.00 
E) No commission is charged 
A) $19.00 
B) $222.30 
C) $500.00 
D) $1170.00 
E) No commission is charged

Question 19

An affordable way for investors to invest in a diversified basket of securities; provides the diversification of an index fund with the flexibility of a stock is with a(n) ____________ fund.

Accepted Answer

A) closed-end 
B) open-end 
C) exchange-traded 
D) index 
E) convertible 
A) closed-end 
B) open-end 
C) exchange-traded 
D) index 
E) convertible

Question 20

Tax information for mutual funds is reported as part of the year-end statement sent out by investment companies.

Accepted Answer

A) True 
 B)False

To purchase shares in an open-end fund, you may use four options: regular accounts, voluntary savings plans, contractual savings plans and reinvestment plans.

For a mutual fund, the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

What type of fund sacrifices diversification in an effort to build capital gains?

Typically, you must invest at least $250 to open a mutual fund account.

An individual who helps investors decide when to switch their investment from one fund to another fund is called a(n)

The net asset value per mutual fund share is the current market value of the securities contained in the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding.

A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n) ____________ fund.

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

The Sage Mutual Fund's portfolio is valued at $120 million.The fund has liabilities of $10 million, and the investment company sponsoring the fund has issued 5,000,000 shares.What is the fund's net asset value per share?

Even though they are under professional management, the individual investor to should evaluate a mutual fund investment.

Which of the following factors would not affect the relationship between an individual's investment goals and the goals of a mutual fund?

What type of fund seeks to aim for tax-advantaged income with some possibility of capital growth?

Which of the following is not a withdrawal option for a mutual fund?

In a newspaper quotation, which of the following letters would indicate if a mutual fund is a no load fund?

Which of the following statements is false?

What type of fee is charged with each purchase?

What type of fund seeks to achieve a high level of income and liquidity through investment in short-term money market instruments, such as T-bills, commercial paper, and short-term government bonds?

Anne Lily purchased 260 shares of the New Sage Growth Fund.The net asset value for each share at the time of purchase was $19.If this fund charges a 4.5 percent load, what is the commission amount she will pay the investment company?

An affordable way for investors to invest in a diversified basket of securities; provides the diversification of an index fund with the flexibility of a stock is with a(n) ____________ fund.

Tax information for mutual funds is reported as part of the year-end statement sent out by investment companies.

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

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Exam 13: Investing in Mutual Funds

To purchase shares in an open-end fund, you may use four options: regular accounts, voluntary savings plans, contractual savings plans and reinvestment plans.

For a mutual fund, the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

What type of fund sacrifices diversification in an effort to build capital gains?

Typically, you must invest at least $250 to open a mutual fund account.

An individual who helps investors decide when to switch their investment from one fund to another fund is called a(n)

The net asset value per mutual fund share is the current market value of the securities contained in the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding.

A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n) ____________ fund.

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

The Sage Mutual Fund's portfolio is valued at $120 million.The fund has liabilities of $10 million, and the investment company sponsoring the fund has issued 5,000,000 shares.What is the fund's net asset value per share?

Even though they are under professional management, the individual investor to should evaluate a mutual fund investment.

Which of the following factors would not affect the relationship between an individual's investment goals and the goals of a mutual fund?

What type of fund seeks to aim for tax-advantaged income with some possibility of capital growth?

Which of the following is not a withdrawal option for a mutual fund?

In a newspaper quotation, which of the following letters would indicate if a mutual fund is a no load fund?

Which of the following statements is false?

What type of fee is charged with each purchase?

What type of fund seeks to achieve a high level of income and liquidity through investment in short-term money market instruments, such as T-bills, commercial paper, and short-term government bonds?

Anne Lily purchased 260 shares of the New Sage Growth Fund.The net asset value for each share at the time of purchase was $19.If this fund charges a 4.5 percent load, what is the commission amount she will pay the investment company?

An affordable way for investors to invest in a diversified basket of securities; provides the diversification of an index fund with the flexibility of a stock is with a(n) ____________ fund.

Tax information for mutual funds is reported as part of the year-end statement sent out by investment companies.

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