Question 1

Mutual funds that apportion their investments among common stocks and bonds are referred to as small-cap funds.

Accepted Answer

A) True 
 B)False  False

Question 2

Sloan Richards is buying shares in a mutual fund that invests in companies that have a market capitalization of less than $2 billion.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 C

Question 3

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.bond fund 
A) growth fund 
B) small cap fund 
C) high-yield bond fund 
D) international fund 
E) short-term U.S.bond fund E

Question 4

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 5

Henrietta Marston plans to retire in the year 2050.She is considering a fund that will be more aggressive now and become more conservative as she approaches retirement.Which of the following funds would you recommend to her?

Accepted Answer

A) equity income fund 
B) regional fund 
C) sector fund 
D) lifecycle fund 
E) fund of funds 
A) equity income fund 
B) regional fund 
C) sector fund 
D) lifecycle fund 
E) fund of funds

Question 6

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

Accepted Answer

A) regular account transaction. 
B) voluntary savings plan. 
C) contractual savings plan. 
D) minimum withdrawal plan. 
E) free contract plan. 
A) regular account transaction. 
B) voluntary savings plan. 
C) contractual savings plan. 
D) minimum withdrawal plan. 
E) free contract plan.

Question 7

Income dividends and capital gain distributions are:

Accepted Answer

A) exempt from taxation. 
B) subject to federal taxation. 
C) subject to federal taxation after the first $1,000. 
D) subject to federal taxation after the first $5,000. 
E) subject to federal taxation after the first $10,000. 
A) exempt from taxation. 
B) subject to federal taxation. 
C) subject to federal taxation after the first $1,000. 
D) subject to federal taxation after the first $5,000. 
E) subject to federal taxation after the first $10,000.

Question 8

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential.

Accepted Answer

A) True 
 B)False

Question 9

For a mutual fund,the typical yearly management fee ranges from 2.5 to 5 percent of the total dollar amount invested.

Accepted Answer

A) True 
 B)False

Question 10

Mary Cooper just purchased 100 shares in the All-American Fund.The purchase cost for each share was $20.If this fund charges a 5 percent load,what is the total amount of commission she will pay the investment company?

Accepted Answer

A) $100 
B) $1,000 
C) $2,000 
D) $200 
E) $1 
A) $100 
B) $1,000 
C) $2,000 
D) $200 
E) $1

Question 11

An investment company sponsoring a mutual fund must furnish shareholders a prospectus each year.

Accepted Answer

A) True 
 B)False

Question 12

When an investor purchases shares in a load fund,the average sales charge is usually between ____________ percent.

Accepted Answer

A) 0.5 to 2 
B) 1 and 3 
C) 3 and 5 
D) 5 and 7 
E) 4 and 6 
A) 0.5 to 2 
B) 1 and 3 
C) 3 and 5 
D) 5 and 7 
E) 4 and 6

Question 13

In late 2009,there were over 12,000 mutual funds,and the number continues to increase each year.

Accepted Answer

A) True 
 B)False

Question 14

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 15

For most mutual funds,the net asset value is calculated:

Accepted Answer

A) yearly. 
B) quarterly. 
C) weekly. 
D) daily. 
E) hourly. 
A) yearly. 
B) quarterly. 
C) weekly. 
D) daily. 
E) hourly.

Question 16

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

Question 17

A mutual fund that invests in investment-grade corporate debt with maturities between 5 and 10 years is called a(n)____________ fund.

Accepted Answer

A) long-term bond 
B) growth 
C) sector 
D) income 
E) intermediate corporate bond 
A) long-term bond 
B) growth 
C) sector 
D) income 
E) intermediate corporate bond

Question 18

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 19

Which of the following is an advantage of an exchange traded fund (ETF)?

Accepted Answer

A) no minimum investment amount 
B) buying and selling shares through a broker at any time at the current market price 
C) low management fees 
D) using limit orders to both buy and sell 
E) all of the other answers 
A) no minimum investment amount 
B) buying and selling shares through a broker at any time at the current market price 
C) low management fees 
D) using limit orders to both buy and sell 
E) all of the other answers

Question 20

Conrad Maestro is buying shares in a mutual fund that seeks rapid price appreciation by purchasing stocks whose price is expected to increase dramatically in a short period of time.What type of mutual fund is he purchasing?

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

Mutual funds that apportion their investments among common stocks and bonds are referred to as small-cap funds.

Sloan Richards is buying shares in a mutual fund that invests in companies that have a market capitalization of less than $2 billion.What type of mutual fund is this?

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?

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

Henrietta Marston plans to retire in the year 2050.She is considering a fund that will be more aggressive now and become more conservative as she approaches retirement.Which of the following funds would you recommend to her?

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

Income dividends and capital gain distributions are:

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential.

For a mutual fund,the typical yearly management fee ranges from 2.5 to 5 percent of the total dollar amount invested.

Mary Cooper just purchased 100 shares in the All-American Fund.The purchase cost for each share was $20.If this fund charges a 5 percent load,what is the total amount of commission she will pay the investment company?

An investment company sponsoring a mutual fund must furnish shareholders a prospectus each year.

When an investor purchases shares in a load fund,the average sales charge is usually between ____________ percent.

In late 2009,there were over 12,000 mutual funds,and the number continues to increase each year.

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

For most mutual funds,the net asset value is calculated:

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?

A mutual fund that invests in investment-grade corporate debt with maturities between 5 and 10 years is called a(n)____________ fund.

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.

Which of the following is an advantage of an exchange traded fund (ETF)?

Conrad Maestro is buying shares in a mutual fund that seeks rapid price appreciation by purchasing stocks whose price is expected to increase dramatically in a short period of time.What type of mutual fund is he purchasing?

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

Mutual funds that apportion their investments among common stocks and bonds are referred to as small-cap funds.

Sloan Richards is buying shares in a mutual fund that invests in companies that have a market capitalization of less than $2 billion.What type of mutual fund is this?

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?

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

Henrietta Marston plans to retire in the year 2050.She is considering a fund that will be more aggressive now and become more conservative as she approaches retirement.Which of the following funds would you recommend to her?

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

Income dividends and capital gain distributions are:

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential.

For a mutual fund,the typical yearly management fee ranges from 2.5 to 5 percent of the total dollar amount invested.

Mary Cooper just purchased 100 shares in the All-American Fund.The purchase cost for each share was $20.If this fund charges a 5 percent load,what is the total amount of commission she will pay the investment company?

An investment company sponsoring a mutual fund must furnish shareholders a prospectus each year.

When an investor purchases shares in a load fund,the average sales charge is usually between ____________ percent.

In late 2009,there were over 12,000 mutual funds,and the number continues to increase each year.

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

For most mutual funds,the net asset value is calculated:

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?

A mutual fund that invests in investment-grade corporate debt with maturities between 5 and 10 years is called a(n)____________ fund.

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.

Which of the following is an advantage of an exchange traded fund (ETF)?

Conrad Maestro is buying shares in a mutual fund that seeks rapid price appreciation by purchasing stocks whose price is expected to increase dramatically in a short period of time.What type of mutual fund is he purchasing?

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