Question 1

An investment company sponsoring a mutual fund must give potential investors a(n):

Accepted Answer

A)  12b-1 report. 
B)  prospectus. 
C)  disclosure/evaluation form. 
D)  redemption fee sheet. 
E)  annual report. 
A)  12b-1 report. 
B)  prospectus. 
C)  disclosure/evaluation form. 
D)  redemption fee sheet. 
E)  annual report.

Question 2

The major reasons why investors purchase mutual funds are professional management and diversification.

Accepted Answer

A) True 
 B)False

Question 3

Contingent deferred sales loads may also be referred to as ____ loads.

Accepted Answer

A)  front-end 
B)  back-end 
C)  level 
D)  purchase 
E)  investiture 
A)  front-end 
B)  back-end 
C)  level 
D)  purchase 
E)  investiture

Question 4

Approximately ____________ percent of all mutual funds are open-end funds.

Accepted Answer

A)  5 
B)  6 
C)  30 
D)  72 
E)  92 
A)  5 
B)  6 
C)  30 
D)  72 
E)  92

Question 5

Which of the following is true?

Accepted Answer

A)  More than 87 million individual Americans own mutual funds. 
B)  Nearly half of all U.S. households own mutual funds. 
C)  There are more than 12,000 mutual funds available. 
D)  By the end of 2009, the combined value of assets held by mutual funds exceeded 12.2 trillion dollars. 
E)  All of these statements are true. 
A)  More than 87 million individual Americans own mutual funds. 
B)  Nearly half of all U.S. households own mutual funds. 
C)  There are more than 12,000 mutual funds available. 
D)  By the end of 2009, the combined value of assets held by mutual funds exceeded 12.2 trillion dollars. 
E)  All of these statements are true.

Question 6

While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds.

Accepted Answer

A) True 
 B)False

Question 7

Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:

Accepted Answer

A)  1 percent or less. 
B)  between 1 and 2 percent. 
C)  between 2 and 3 percent. 
D)  between 3 and 4 percent. 
E)  over 4 percent. 
A)  1 percent or less. 
B)  between 1 and 2 percent. 
C)  between 2 and 3 percent. 
D)  between 3 and 4 percent. 
E)  over 4 percent.

Question 8

A municipal bond fund:

Accepted Answer

A)  is too risky for most investors. 
B)  provides investors with federally tax-free interest income. 
C)  invests in bonds that are backed by the federal government. 
D)  is a risk-free investment. 
E)  invests solely in Treasury bonds. 
A)  is too risky for most investors. 
B)  provides investors with federally tax-free interest income. 
C)  invests in bonds that are backed by the federal government. 
D)  is a risk-free investment. 
E)  invests solely in Treasury bonds.

Question 9

Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee 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 10

A mutual fund that provides tax-exempt interest income is referred to as a long-term U.S. bond fund.

Accepted Answer

A) True 
 B)False

Question 11

While many exceptions exist, the average load charge for mutual funds ranges between what percent of the purchase price?

Accepted Answer

A)  1-3 
B)  2-4 
C)  3-5 
D)  4-6 
E)  5-7 
A)  1-3 
B)  2-4 
C)  3-5 
D)  4-6 
E)  5-7

Question 12

An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  Withdrawing a specified, dollar amount each investment period 
B)  Liquidating, or "selling off" a certain number of shares each investment period 
C)  Withdrawing a fixed percentage of asset growth 
D)  Withdrawing all income that results from dividends and capital gains distributions 
E)  Withdrawing a stated amount and treating it as a short-term loan 
A)  Withdrawing a specified, dollar amount each investment period 
B)  Liquidating, or "selling off" a certain number of shares each investment period 
C)  Withdrawing a fixed percentage of asset growth 
D)  Withdrawing all income that results from dividends and capital gains distributions 
E)  Withdrawing a stated amount and treating it as a short-term loan

Question 14

All the different fees and fund operating costs are often referred to as a(n):

Accepted Answer

A)  investment ratio. 
B)  expense ratio. 
C)  financial ratio. 
D)  expense turnover. 
E)  management ratio. 
A)  investment ratio. 
B)  expense ratio. 
C)  financial ratio. 
D)  expense turnover. 
E)  management ratio.

Question 15

Contingent deferred sales loads generally:

Accepted Answer

A)  apply until the shares you own are in the fund for 10 years or more. 
B)  apply regardless of how long your shares have been invested. 
C)  increase as the length of time you have been in the fund increases. 
D)  decline gradually until there is no withdrawal fee. 
E)  apply only for the first year funds are invested. 
A)  apply until the shares you own are in the fund for 10 years or more. 
B)  apply regardless of how long your shares have been invested. 
C)  increase as the length of time you have been in the fund increases. 
D)  decline gradually until there is no withdrawal fee. 
E)  apply only for the first year funds are invested.

Question 16

Tax information for mutual funds is reported as part of the year-end statement or IRS Form 1099-DIV.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  0.25 to 1.5 
B)  1.5 to 3 
C)  3 to 4 
D)  5 to 6 1/2 
E)  7 to 8 1/2 
A)  0.25 to 1.5 
B)  1.5 to 3 
C)  3 to 4 
D)  5 to 6 1/2 
E)  7 to 8 1/2

Question 18

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund is he buying?

Accepted Answer

A)  Socially responsible fund 
B)  Sector fund 
C)  Small-cap fund 
D)  Index fund 
E)  Growth fund 
A)  Socially responsible fund 
B)  Sector fund 
C)  Small-cap fund 
D)  Index fund 
E)  Growth fund

An investment company sponsoring a mutual fund must give potential investors a(n):

The major reasons why investors purchase mutual funds are professional management and diversification.

Contingent deferred sales loads may also be referred to as ____ loads.

Approximately ____________ percent of all mutual funds are open-end funds.

Which of the following is true?

While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds.

Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:

A municipal bond fund:

Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee is a class ____________ fund.

A mutual fund that provides tax-exempt interest income is referred to as a long-term U.S. bond fund.

While many exceptions exist, the average load charge for mutual funds ranges between what percent of the purchase price?

An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index.

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

All the different fees and fund operating costs are often referred to as a(n):

Contingent deferred sales loads generally:

Tax information for mutual funds is reported as part of the year-end statement or IRS Form 1099-DIV.

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

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund is he buying?

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

Filters

Exam 16: Investing in Mutual Funds

An investment company sponsoring a mutual fund must give potential investors a(n):

The major reasons why investors purchase mutual funds are professional management and diversification.

Contingent deferred sales loads may also be referred to as ____ loads.

Approximately ____________ percent of all mutual funds are open-end funds.

Which of the following is true?

While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds.

Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:

A municipal bond fund:

Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee is a class ____________ fund.

A mutual fund that provides tax-exempt interest income is referred to as a long-term U.S. bond fund.

While many exceptions exist, the average load charge for mutual funds ranges between what percent of the purchase price?

An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index.

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

All the different fees and fund operating costs are often referred to as a(n):

Contingent deferred sales loads generally:

Tax information for mutual funds is reported as part of the year-end statement or IRS Form 1099-DIV.

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

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund is he buying?

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

Filters