Question 1

Which of these is not a true statement?

Accepted Answer

A) ETFs can be purchased through a broker. 
B) ETFs can be purchased on margin. 
C) ETFs can be sold short. 
D) ETFs have lower management expenses than conventional mutual funds. 
E) ETFs cannot be purchased through a broker, on margin, sold short, and have lower management expenses than conventional mutual funds. 
A) ETFs can be purchased through a broker. 
B) ETFs can be purchased on margin. 
C) ETFs can be sold short. 
D) ETFs have lower management expenses than conventional mutual funds. 
E) ETFs cannot be purchased through a broker, on margin, sold short, and have lower management expenses than conventional mutual funds.

Question 2

What is not an disadvantage of investing in mutual funds?

Accepted Answer

A) Diversification 
B) Professional management fees 
C) Inability to control capital gains 
D) Potential market risk 
E) Withdrawal costs 
A) Diversification 
B) Professional management fees 
C) Inability to control capital gains 
D) Potential market risk 
E) Withdrawal costs

Question 3

What is step 4 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 4

A no-load fund is a mutual fund in which no sales charge is paid by the individual investor to purchase shares.

Accepted Answer

A) True 
 B)False

Question 5

In a newspaper quotation, which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

Accepted Answer

A) N 
B) R 
C) FR 
D) B 
E) It is impossible to tell if there is a front-end and a back-end fee by looking in the newspaper. 
A) N 
B) R 
C) FR 
D) B 
E) It is impossible to tell if there is a front-end and a back-end fee by looking in the newspaper.

Question 6

If a mutual fund charges a front-end load of 3%, how much must the investor pay per unit if the NAVPS is $10.00?

Accepted Answer

A) $9.70 
B) $10.00 
C) $10.16 
D) $10.31 
E) $13.00 
A) $9.70 
B) $10.00 
C) $10.16 
D) $10.31 
E) $13.00

Question 7

A mutual fund that 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 is __________________

Accepted Answer

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

Question 8

A redemption fee is a 1 to 6 percent charge that shareholders pay when they withdraw their investment from a mutual fund.

Accepted Answer

A) True 
 B)False

Question 9

For a load fund, the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

Accepted Answer

A) True 
 B)False

Question 10

What is not an advantage of investing in mutual funds?

Accepted Answer

A) Diversification 
B) Professional management 
C) Easy of buying and selling shares 
D) Potential market risk 
E) Switching privileges 
A) Diversification 
B) Professional management 
C) Easy of buying and selling shares 
D) Potential market risk 
E) Switching privileges

Question 11

As a shareholder in a mutual fund, you should receive a(n)

Accepted Answer

A) annual report. 
B) quarterly report. 
C) redemption fee sheet. 
D) letter from the president of the investment company that details what the fund's objectives are. 
E) copy of the annual mutual funds evaluation provided by Changing Times magazine. 
A) annual report. 
B) quarterly report. 
C) redemption fee sheet. 
D) letter from the president of the investment company that details what the fund's objectives are. 
E) copy of the annual mutual funds evaluation provided by Changing Times magazine.

Question 12

A mutual fund that aims for capital gains is:

Accepted Answer

A) a balanced asset allocation fund 
B) a bond fund 
C) an equity or common stock fund 
D) a specialty fund 
E) an ethical fund 
A) a balanced asset allocation fund 
B) a bond fund 
C) an equity or common stock fund 
D) a specialty fund 
E) an ethical fund

Question 13

A mutual fund that aims for long-term growth through capital appreciation and the reinvestment of income by investing in income producing real property 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 14

The most popular and least complicated method of purchasing shares in an open-end mutual fund is through 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 15

What type of fund seeks to aim for income and safety?

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 16

The management fee for most mutual funds ranges between ____________ percent.

Accepted Answer

A) 0.5 to 4 
B) 1 to 2 
C) 2 to 4 
D) 5 to 6 1/2 
E) 7 to 8 1/2 
A) 0.5 to 4 
B) 1 to 2 
C) 2 to 4 
D) 5 to 6 1/2 
E) 7 to 8 1/2

Question 17

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:

Accepted Answer

A) net asset value. 
B) outstanding balance. 
C) per share value. 
D) book value. 
E) accounting value. 
A) net asset value. 
B) outstanding balance. 
C) per share value. 
D) book value. 
E) accounting value.

Question 18

A mutual fund that seeks to make investment decisions that are guided by moral criteria that can vary from fund to fund 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 19

Mutual funds that invest in smaller, lesser known companies that offer higher growth potential are referred to as dividend funds.

Accepted Answer

A) True 
 B)False

Question 20

Another name for a mutual fund that charges a contingent deferred sales load is a(n) ____________ fund.

Accepted Answer

A) bare bones 
B) end state 
C) bare back 
D) back-end 
E) pay later 
A) bare bones 
B) end state 
C) bare back 
D) back-end 
E) pay later

Which of these is not a true statement?

What is not an disadvantage of investing in mutual funds?

What is step 4 of the common steps used by investors to evaluate mutual funds?

A no-load fund is a mutual fund in which no sales charge is paid by the individual investor to purchase shares.

In a newspaper quotation, which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

If a mutual fund charges a front-end load of 3%, how much must the investor pay per unit if the NAVPS is $10.00?

A mutual fund that 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 is __________________

A redemption fee is a 1 to 6 percent charge that shareholders pay when they withdraw their investment from a mutual fund.

For a load fund, the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

What is not an advantage of investing in mutual funds?

As a shareholder in a mutual fund, you should receive a(n)

A mutual fund that aims for capital gains is:

A mutual fund that aims for long-term growth through capital appreciation and the reinvestment of income by investing in income producing real property is __________________

The most popular and least complicated method of purchasing shares in an open-end mutual fund is through a

What type of fund seeks to aim for income and safety?

The management fee for most mutual funds ranges between ____________ percent.

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:

A mutual fund that seeks to make investment decisions that are guided by moral criteria that can vary from fund to fund is __________________

Mutual funds that invest in smaller, lesser known companies that offer higher growth potential are referred to as dividend funds.

Another name for a mutual fund that charges a contingent deferred sales load is a(n) ____________ fund.

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

Exam 13: Investing in Mutual Funds

Which of these is not a true statement?

What is not an disadvantage of investing in mutual funds?

What is step 4 of the common steps used by investors to evaluate mutual funds?

A no-load fund is a mutual fund in which no sales charge is paid by the individual investor to purchase shares.

In a newspaper quotation, which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

If a mutual fund charges a front-end load of 3%, how much must the investor pay per unit if the NAVPS is $10.00?

A mutual fund that 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 is __________________

A redemption fee is a 1 to 6 percent charge that shareholders pay when they withdraw their investment from a mutual fund.

For a load fund, the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

What is not an advantage of investing in mutual funds?

As a shareholder in a mutual fund, you should receive a(n)

A mutual fund that aims for capital gains is:

A mutual fund that aims for long-term growth through capital appreciation and the reinvestment of income by investing in income producing real property is __________________

The most popular and least complicated method of purchasing shares in an open-end mutual fund is through a

What type of fund seeks to aim for income and safety?

The management fee for most mutual funds ranges between ____________ percent.

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:

A mutual fund that seeks to make investment decisions that are guided by moral criteria that can vary from fund to fund is __________________

Mutual funds that invest in smaller, lesser known companies that offer higher growth potential are referred to as dividend funds.

Another name for a mutual fund that charges a contingent deferred sales load is a(n) ____________ fund.

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