Question 1

For a load fund, the average commission usually ranges between 3 and 5 percent of the purchase price.

Accepted Answer

A) True 
 B)False

Question 2

Another name for a mutual fund that charges a contingent deferred sales load is a class ____________ fund.

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 3

Which one of the following statements is false?

Accepted Answer

A)  Many investors have found a wealth of information about mutual fund investments on the internet. 
B)  It is possible to obtain market values for a mutual fund by using the internet. 
C)  Most investment companies that sponsor mutual funds have a web page. 
D)  Professional advisory services are prohibited from discussing mutual funds on their web pages. 
E)  A mutual fund's website will provide information about how to open an account, current market quotes, and specific fund information. 
A)  Many investors have found a wealth of information about mutual fund investments on the internet. 
B)  It is possible to obtain market values for a mutual fund by using the internet. 
C)  Most investment companies that sponsor mutual funds have a web page. 
D)  Professional advisory services are prohibited from discussing mutual funds on their web pages. 
E)  A mutual fund's website will provide information about how to open an account, current market quotes, and specific fund information.

Question 4

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Accepted Answer

A)  closed-end 
B)  open-end 
C)  load 
D)  no-load 
E)  convertible 
A)  closed-end 
B)  open-end 
C)  load 
D)  no-load 
E)  convertible

Question 5

Explain the difference between a load fund and a no-load fund. From a performance standpoint, is there a significant difference between mutual funds that charge commissions and those that do not?

Accepted Answer

A load fund is a mutual fund in which in

Question 6

Bob Newsome purchased 250 shares of the Northern Lights Growth Fund. The purchase cost was $30 per share. If this fund charges a 3 percent load, what is the commission amount he will pay the investment company?

Accepted Answer

A)  $3 
B)  $30 
C)  $300 
D)  $225 
E)  $250 
A)  $3 
B)  $30 
C)  $300 
D)  $225 
E)  $250

Question 7

The Capitalist Mutual Fund's portfolio is valued at $45 million. The fund has liabilities of $3 million, and the investment company sponsoring the fund has issued 1,600,000 shares. What is the fund's net asset value?

Accepted Answer

A)  $100.00 
B)  $26.25 
C)  $52.50 
D)  $3.75 
E)  $1.00 
A)  $100.00 
B)  $26.25 
C)  $52.50 
D)  $3.75 
E)  $1.00

Question 8

Investors in closed-end, exchange-traded funds, and open-end funds can make money by purchasing shares at a low price and then selling them at a higher price.

Accepted Answer

A) True 
 B)False

Question 9

A mutual fund in which new shares are issued and existing shares redeemed by the investment company at the request of investors is called a(n) ____________ fund.

Accepted Answer

A)  closed-end 
B)  open-end 
C)  load 
D)  no-load 
E)  convertible 
A)  closed-end 
B)  open-end 
C)  load 
D)  no-load 
E)  convertible

Question 10

There are more exchange-traded funds than there are open-end mutual funds.

Accepted Answer

A) True 
 B)False

Question 11

If you are seeking federally tax-exempt income, which type of mutual fund should you purchase?

Accepted Answer

A)  Junk bond fund 
B)  Intermediate corporate bond fund 
C)  Municipal bond fund 
D)  Short-term government bond 
E)  World bond fund 
A)  Junk bond fund 
B)  Intermediate corporate bond fund 
C)  Municipal bond fund 
D)  Short-term government bond 
E)  World bond fund

Question 12

Which type of mutual fund invests primarily in high-yield, high-risk corporate bonds?

Accepted Answer

A)  Junk bond fund 
B)  Intermediate corporate bond fund 
C)  Municipal bond fund 
D)  Short-term government bond fund 
E)  World bond fund 
A)  Junk bond fund 
B)  Intermediate corporate bond fund 
C)  Municipal bond fund 
D)  Short-term government bond fund 
E)  World bond fund

Question 13

Which one of the following publications does not provide readers with information about mutual funds?

Accepted Answer

A)  Business Week 
B)  Current Business Survey 
C)  Forbes 
D)  Kiplinger's Personal Finance Magazine 
E)  Money 
A)  Business Week 
B)  Current Business Survey 
C)  Forbes 
D)  Kiplinger's Personal Finance Magazine 
E)  Money

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a disadvantage associated with purchasing a mutual fund?

Accepted Answer

A)  Difficulty of buying and selling shares 
B)  Aggressive or unethical sales personnel 
C)  Only one withdrawal option 
D)  No distribution of income and capital gains 
E)  All of these are disadvantages associated with purchasing shares in a mutual fund. 
A)  Difficulty of buying and selling shares 
B)  Aggressive or unethical sales personnel 
C)  Only one withdrawal option 
D)  No distribution of income and capital gains 
E)  All of these are disadvantages associated with purchasing shares in a mutual fund.

Question 16

Noelle Simon is buying shares in a mutual fund that only invests in companies located in Latin America. What type of mutual fund is this?

Accepted Answer

A)  Aggressive growth fund 
B)  Equity income fund 
C)  Global fund 
D)  International fund 
E)  Regional fund 
A)  Aggressive growth fund 
B)  Equity income fund 
C)  Global fund 
D)  International fund 
E)  Regional fund

Question 17

Income dividends are the earnings a fund pays to shareholders from its dividend and interest income.

Accepted Answer

A) True 
 B)False

Question 18

High-yield bond funds are sometimes referred to as junk bond funds.

Accepted Answer

A) True 
 B)False

Question 19

A mutual fund that invests in common stocks of rapidly growing corporations with higher-than-average revenue and earnings growth is called a(n) ____________ fund.

Accepted Answer

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

Question 20

A fee that some investment companies charge for advertising and marketing a mutual fund is called a:

Accepted Answer

A)  14A-1 fee. 
B)  12b-1 fee. 
C)  18-2 fee. 
D)  403(b) fee. 
E)  401(k) fee. 
A)  14A-1 fee. 
B)  12b-1 fee. 
C)  18-2 fee. 
D)  403(b) fee. 
E)  401(k) fee.

For a load fund, the average commission usually ranges between 3 and 5 percent of the purchase price.

Another name for a mutual fund that charges a contingent deferred sales load is a class ____________ fund.

Which one of the following statements is false?

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Explain the difference between a load fund and a no-load fund. From a performance standpoint, is there a significant difference between mutual funds that charge commissions and those that do not?

Bob Newsome purchased 250 shares of the Northern Lights Growth Fund. The purchase cost was $30 per share. If this fund charges a 3 percent load, what is the commission amount he will pay the investment company?

The Capitalist Mutual Fund's portfolio is valued at $45 million. The fund has liabilities of $3 million, and the investment company sponsoring the fund has issued 1,600,000 shares. What is the fund's net asset value?

Investors in closed-end, exchange-traded funds, and open-end funds can make money by purchasing shares at a low price and then selling them at a higher price.

A mutual fund in which new shares are issued and existing shares redeemed by the investment company at the request of investors is called a(n) ____________ fund.

There are more exchange-traded funds than there are open-end mutual funds.

If you are seeking federally tax-exempt income, which type of mutual fund should you purchase?

Which type of mutual fund invests primarily in high-yield, high-risk corporate bonds?

Which one of the following publications does not provide readers with information about mutual funds?

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

Which of the following is a disadvantage associated with purchasing a mutual fund?

Noelle Simon is buying shares in a mutual fund that only invests in companies located in Latin America. What type of mutual fund is this?

Income dividends are the earnings a fund pays to shareholders from its dividend and interest income.

High-yield bond funds are sometimes referred to as junk bond funds.

A mutual fund that invests in common stocks of rapidly growing corporations with higher-than-average revenue and earnings growth is called a(n) ____________ fund.

A fee that some investment companies charge for advertising and marketing a mutual fund is called a:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 16: Investing in Mutual Funds

For a load fund, the average commission usually ranges between 3 and 5 percent of the purchase price.

Another name for a mutual fund that charges a contingent deferred sales load is a class ____________ fund.

Which one of the following statements is false?

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Explain the difference between a load fund and a no-load fund. From a performance standpoint, is there a significant difference between mutual funds that charge commissions and those that do not?

Bob Newsome purchased 250 shares of the Northern Lights Growth Fund. The purchase cost was $30 per share. If this fund charges a 3 percent load, what is the commission amount he will pay the investment company?

The Capitalist Mutual Fund's portfolio is valued at $45 million. The fund has liabilities of $3 million, and the investment company sponsoring the fund has issued 1,600,000 shares. What is the fund's net asset value?

Investors in closed-end, exchange-traded funds, and open-end funds can make money by purchasing shares at a low price and then selling them at a higher price.

A mutual fund in which new shares are issued and existing shares redeemed by the investment company at the request of investors is called a(n) ____________ fund.

There are more exchange-traded funds than there are open-end mutual funds.

If you are seeking federally tax-exempt income, which type of mutual fund should you purchase?

Which type of mutual fund invests primarily in high-yield, high-risk corporate bonds?

Which one of the following publications does not provide readers with information about mutual funds?

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

Which of the following is a disadvantage associated with purchasing a mutual fund?

Noelle Simon is buying shares in a mutual fund that only invests in companies located in Latin America. What type of mutual fund is this?

Income dividends are the earnings a fund pays to shareholders from its dividend and interest income.

High-yield bond funds are sometimes referred to as junk bond funds.

A mutual fund that invests in common stocks of rapidly growing corporations with higher-than-average revenue and earnings growth is called a(n) ____________ fund.

A fee that some investment companies charge for advertising and marketing a mutual fund is called a:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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