Question 1

A mutual fund in which no sales charge is paid by the individual investor is called a ____________ 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 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Because of professional management,there is no need for the individual investor to evaluate a mutual fund investment.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is false?

Accepted Answer

A) The purpose of investing in a closed-end fund, exchange-traded fund or open-end mutual fund is to earn a financial return. 
B) Income dividends are the earnings that a fund pays to shareholders from its dividend and interest income. 
C) Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio. 
D) The only way to make money on a mutual fund is by selling shares at a higher price than was initially paid for them. 
E) Income dividends are taxable. 
A) The purpose of investing in a closed-end fund, exchange-traded fund or open-end mutual fund is to earn a financial return. 
B) Income dividends are the earnings that a fund pays to shareholders from its dividend and interest income. 
C) Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio. 
D) The only way to make money on a mutual fund is by selling shares at a higher price than was initially paid for them. 
E) Income dividends are taxable.

Question 6

For a mutual fund,the annual management fee is a fixed percentage of the fund's total liabilities.

Accepted Answer

A) True 
 B)False

Question 7

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 if you own the shares for more than five years. 
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 if you own the shares for more than five years. 
E) apply only for the first year funds are invested.

Question 8

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

Accepted Answer

A) 5 
B) 6 
C) 30 
D) 72 
E) 82 
A) 5 
B) 6 
C) 30 
D) 72 
E) 82

Question 9

A mutual fund that invests in companies within the same industry is called a ____________ fund.

Accepted Answer

A) growth-income 
B) income 
C) sector 
D) small-cap 
E) money market 
A) growth-income 
B) income 
C) sector 
D) small-cap 
E) money market

Question 10

All of the following information is contained in a mutual fund's fee table,except:

Accepted Answer

A) expected return on investment. 
B) management fees. 
C) contingent deferred sales fees. 
D) 12b-1 fees. 
E) redemption fees. 
A) expected return on investment. 
B) management fees. 
C) contingent deferred sales fees. 
D) 12b-1 fees. 
E) redemption fees.

Question 11

Investors less than 35 years old are less likely to invest in mutual funds than any other age group.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following companies manages assets of $3 trillion and has always been known as the leader in low-cost investing and has over 300 different funds?

Accepted Answer

A) The Vanguard Group 
B) Fidelity Investments 
C) American Funds 
D) Foreign Funds 
E) Standard & Poor's 
A) The Vanguard Group 
B) Fidelity Investments 
C) American Funds 
D) Foreign Funds 
E) Standard & Poor's

Question 13

Sharon Taylor uses all of her dividend income and capital gain distributions to purchase additional shares in her mutual fund.Which one of the following plans is she using?

Accepted Answer

A) Regular account transaction 
B) Voluntary savings plan 
C) Contractual savings plan 
D) Reinvestment plan 
E) Professional management 
A) Regular account transaction 
B) Voluntary savings plan 
C) Contractual savings plan 
D) Reinvestment plan 
E) Professional management

Question 14

A contingent deferred sales load,which is a charge that shareholders pay when they withdraw their investment from a mutual fund,can be as low as 1 percent or as high as ___ depending on how long you own the mutual fund before making a withdrawal.

Accepted Answer

A) 3 percent 
B) 5 percent 
C) 7 percent 
D) 10 percent 
E) 15 percent 
A) 3 percent 
B) 5 percent 
C) 7 percent 
D) 10 percent 
E) 15 percent

Question 15

Which one of the following statements is false?

Accepted Answer

A) Investors purchase mutual funds for diversification. 
B) Investors purchase mutual funds because of their professional management. 
C) Investors who purchase mutual funds are guaranteed a higher rate of return than if they were to purchase comparable stocks and bonds directly. 
D) Professional mutual fund managers work for an investment company. 
E) Even the best portfolio managers sometimes make mistakes. 
A) Investors purchase mutual funds for diversification. 
B) Investors purchase mutual funds because of their professional management. 
C) Investors who purchase mutual funds are guaranteed a higher rate of return than if they were to purchase comparable stocks and bonds directly. 
D) Professional mutual fund managers work for an investment company. 
E) Even the best portfolio managers sometimes make mistakes.

Question 16

Which of the following invests in U.S.Treasury securities?

Accepted Answer

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

Question 17

Morningstar rates mutual funds from the lowest to the highest using _____stars.

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
E) 6 
A) 2 
B) 3 
C) 4 
D) 5 
E) 6

Question 18

Which type of mutual fund invests in corporate bonds with maturities in excess of 10 years?

Accepted Answer

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

Question 19

Because of front-end commission charges,many financial experts and government agencies are critical of:

Accepted Answer

A) regular accounts. 
B) voluntary savings plans. 
C) contractual savings plans. 
D) minimum withdrawal plans. 
E) free contract plans. 
A) regular accounts. 
B) voluntary savings plans. 
C) contractual savings plans. 
D) minimum withdrawal plans. 
E) free contract plans.

Question 20

The Capitalist Mutual Fund's net asset value is $26.25.The fund has liabilities of $3 million and 1,600,000 shares have been issued.What is the value of the fund's portfolio?

Accepted Answer

A) $42 million 
B) $45 million 
C) $50 million 
D) $39 million 
E) $36 million 
A) $42 million 
B) $45 million 
C) $50 million 
D) $39 million 
E) $36 million

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

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

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

Because of professional management,there is no need for the individual investor to evaluate a mutual fund investment.

Which of the following statements is false?

For a mutual fund,the annual management fee is a fixed percentage of the fund's total liabilities.

Contingent deferred sales loads generally:

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

A mutual fund that invests in companies within the same industry is called a ____________ fund.

All of the following information is contained in a mutual fund's fee table,except:

Investors less than 35 years old are less likely to invest in mutual funds than any other age group.

Which of the following companies manages assets of $3 trillion and has always been known as the leader in low-cost investing and has over 300 different funds?

Sharon Taylor uses all of her dividend income and capital gain distributions to purchase additional shares in her mutual fund.Which one of the following plans is she using?

A contingent deferred sales load,which is a charge that shareholders pay when they withdraw their investment from a mutual fund,can be as low as 1 percent or as high as ___ depending on how long you own the mutual fund before making a withdrawal.

Which one of the following statements is false?

Which of the following invests in U.S.Treasury securities?

Morningstar rates mutual funds from the lowest to the highest using _____stars.

Which type of mutual fund invests in corporate bonds with maturities in excess of 10 years?

Because of front-end commission charges,many financial experts and government agencies are critical of:

The Capitalist Mutual Fund's net asset value is $26.25.The fund has liabilities of $3 million and 1,600,000 shares have been issued.What is the value of the fund's portfolio?

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

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Investing in Stock

Investing in Bonds

Investing in Real Estate and Other Investment Alternatives

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Exam 16: Investing in Mutual Funds

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

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

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

Because of professional management,there is no need for the individual investor to evaluate a mutual fund investment.

Which of the following statements is false?

For a mutual fund,the annual management fee is a fixed percentage of the fund's total liabilities.

Contingent deferred sales loads generally:

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

A mutual fund that invests in companies within the same industry is called a ____________ fund.

All of the following information is contained in a mutual fund's fee table,except:

Investors less than 35 years old are less likely to invest in mutual funds than any other age group.

Which of the following companies manages assets of $3 trillion and has always been known as the leader in low-cost investing and has over 300 different funds?

Sharon Taylor uses all of her dividend income and capital gain distributions to purchase additional shares in her mutual fund.Which one of the following plans is she using?

A contingent deferred sales load,which is a charge that shareholders pay when they withdraw their investment from a mutual fund,can be as low as 1 percent or as high as ___ depending on how long you own the mutual fund before making a withdrawal.

Which one of the following statements is false?

Which of the following invests in U.S.Treasury securities?

Morningstar rates mutual funds from the lowest to the highest using _____stars.

Which type of mutual fund invests in corporate bonds with maturities in excess of 10 years?

Because of front-end commission charges,many financial experts and government agencies are critical of:

The Capitalist Mutual Fund's net asset value is $26.25.The fund has liabilities of $3 million and 1,600,000 shares have been issued.What is the value of the fund's portfolio?

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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