Question 1

Which of the following is an example of an exchange-traded fund (commonly referred to as ETF)that is available to track an index?

Accepted Answer

A) Midcap stocks. 
B) Small-cap stocks. 
C) Fixed-income securities. 
D) Commodities. 
E) All of these are correct. 
A) Midcap stocks. 
B) Small-cap stocks. 
C) Fixed-income securities. 
D) Commodities. 
E) All of these are correct. E

Question 2

A load fund is a mutual fund in which investors pay a commission either when they purchase or when they redeem shares.

Accepted Answer

A) True 
 B)False  False

Question 3

Joseph Carter is buying shares in a mutual fund that is investing in stocks all over the world,including the United States.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 C

Question 4

Tisha Elmwood is buying shares in a mutual fund that avoids companies that do harm to people,animals,and the environment.What type of mutual fund is this?

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

Question 5

Nathan Fuller is buying shares in a mutual fund that invests in the same companies as those found in the Standard & Poor's 500.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

Question 6

The average management fee for all mutual funds is:

Accepted Answer

A) less than 0.25 percent. 
B) 0.25 percent to 0.50 percent. 
C) 0.50 to 1 percent. 
D) 1.25 to 2.50 percent. 
E) 2.50 to 5.00 percent. 
A) less than 0.25 percent. 
B) 0.25 percent to 0.50 percent. 
C) 0.50 to 1 percent. 
D) 1.25 to 2.50 percent. 
E) 2.50 to 5.00 percent.

Question 7

A mutual fund that invests in common stocks and bonds with the primary objectives of conserving principal,providing income,and long-term growth is called a ____________ 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 8

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

Accepted Answer

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

Question 9

Last month Nellie Jacobson's divorce became final.As part of the settlement,she received $150,000.She would like to invest in mutual funds,but since she is 62 years old,she is concerned with the safety of her "nest egg." Which of the following mutual funds would you recommend?

Accepted Answer

A) Growth fund 
B) Small cap fund 
C) High-yield bond fund 
D) International fund 
E) Short-term U.S.government bond fund 
A) Growth fund 
B) Small cap fund 
C) High-yield bond fund 
D) International fund 
E) Short-term U.S.government bond fund

Question 10

Today,there are more closed-end funds than there are open-end funds.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Today many investors use which of the following to create a financial plan to generate the income needed to satisfy their long-term goals?

Accepted Answer

A) Invesco company 
B) Nasdaq index 
C) Down Jones Industrial Average 
D) Morgan Stanley company 
E) Standard & Poor's index 
A) Invesco company 
B) Nasdaq index 
C) Down Jones Industrial Average 
D) Morgan Stanley company 
E) Standard & Poor's index

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an advantage of an exchange traded fund?

Accepted Answer

A) No minimum investment amount 
B) Buying and selling shares through a securities exchange at any time during the business day 
C) Low management fees 
D) Using limit orders to both buy and sell 
E) All of these are advantages of ETFs. 
A) No minimum investment amount 
B) Buying and selling shares through a securities exchange at any time during the business day 
C) Low management fees 
D) Using limit orders to both buy and sell 
E) All of these are advantages of ETFs.

Question 16

The typical management fee for 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 17

Cindy and John Appleby just inherited $30,000 and would like to invest the money in a conservative mutual fund.Since they have never invested in mutual funds,they ask for your help.In your own words,describe the sources of information available for evaluating a mutual fund investment.

Accepted Answer

The following factors can be used to eva

Question 18

A mutual fund:

Accepted Answer

A) is a way of investing in a single stock. 
B) offers safety through diversification because a loss in one investment is usually offset by gains in other investments within the fund. 
C) is insured by the FDIC. 
D) is a form of an indirect real estate investment. 
E) is professionally managed so investors need not monitor fund results. 
A) is a way of investing in a single stock. 
B) offers safety through diversification because a loss in one investment is usually offset by gains in other investments within the fund. 
C) is insured by the FDIC. 
D) is a form of an indirect real estate investment. 
E) is professionally managed so investors need not monitor fund results.

Question 19

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

Accepted Answer

A) No fund management fees 
B) Ability to control the timing of the capital gains distributions 
C) Total elimination of market risk 
D) Switching privileges within the same fund family 
E) Purchase/withdrawal costs 
A) No fund management fees 
B) Ability to control the timing of the capital gains distributions 
C) Total elimination of market risk 
D) Switching privileges within the same fund family 
E) Purchase/withdrawal costs

Question 20

Another name for a mutual fund that doesn't charge a sales load or a contingent deferred sales fee,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

Which of the following is an example of an exchange-traded fund (commonly referred to as ETF)that is available to track an index?

A load fund is a mutual fund in which investors pay a commission either when they purchase or when they redeem shares.

Joseph Carter is buying shares in a mutual fund that is investing in stocks all over the world,including the United States.What type of mutual fund is this?

Tisha Elmwood is buying shares in a mutual fund that avoids companies that do harm to people,animals,and the environment.What type of mutual fund is this?

Nathan Fuller is buying shares in a mutual fund that invests in the same companies as those found in the Standard & Poor's 500.What type of mutual fund is he buying?

The average management fee for all mutual funds is:

A mutual fund that invests in common stocks and bonds with the primary objectives of conserving principal,providing income,and long-term growth is called a ____________ fund.

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

Last month Nellie Jacobson's divorce became final.As part of the settlement,she received $150,000.She would like to invest in mutual funds,but since she is 62 years old,she is concerned with the safety of her "nest egg." Which of the following mutual funds would you recommend?

Today,there are more closed-end funds than there are open-end funds.

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

Today many investors use which of the following to create a financial plan to generate the income needed to satisfy their long-term goals?

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

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

Which of the following is an advantage of an exchange traded fund?

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

Cindy and John Appleby just inherited $30,000 and would like to invest the money in a conservative mutual fund.Since they have never invested in mutual funds,they ask for your help.In your own words,describe the sources of information available for evaluating a mutual fund investment.

A mutual fund:

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

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

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 Stock

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

Which of the following is an example of an exchange-traded fund (commonly referred to as ETF)that is available to track an index?

A load fund is a mutual fund in which investors pay a commission either when they purchase or when they redeem shares.

Joseph Carter is buying shares in a mutual fund that is investing in stocks all over the world,including the United States.What type of mutual fund is this?

Tisha Elmwood is buying shares in a mutual fund that avoids companies that do harm to people,animals,and the environment.What type of mutual fund is this?

Nathan Fuller is buying shares in a mutual fund that invests in the same companies as those found in the Standard & Poor's 500.What type of mutual fund is he buying?

The average management fee for all mutual funds is:

A mutual fund that invests in common stocks and bonds with the primary objectives of conserving principal,providing income,and long-term growth is called a ____________ fund.

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

Last month Nellie Jacobson's divorce became final.As part of the settlement,she received $150,000.She would like to invest in mutual funds,but since she is 62 years old,she is concerned with the safety of her "nest egg." Which of the following mutual funds would you recommend?

Today,there are more closed-end funds than there are open-end funds.

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

Today many investors use which of the following to create a financial plan to generate the income needed to satisfy their long-term goals?

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

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

Which of the following is an advantage of an exchange traded fund?

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

Cindy and John Appleby just inherited $30,000 and would like to invest the money in a conservative mutual fund.Since they have never invested in mutual funds,they ask for your help.In your own words,describe the sources of information available for evaluating a mutual fund investment.

A mutual fund:

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

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

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 Stock

Investing in Bonds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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