Question 1

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 2

Martin Campbell wants to invest in mutual funds,but is also worried about diversification.Which fund would you recommend to him?

Accepted Answer

A) income fund. 
B) long-term corporate bond fund. 
C) U.S.government bond fund. 
D) midcap funD. 
E) a fund of funds. 
A) income fund. 
B) long-term corporate bond fund. 
C) U.S.government bond fund. 
D) midcap funD. 
E) a fund of funds.

Question 3

Asset allocation funds invest in various asset classes including stocks,bonds,fixed-income securities,and money market instruments.

Accepted Answer

A) True 
 B)False

Question 4

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 5

A mutual fund that invests in stocks issued by companies with a long history of paying dividends is called a(n)____________ fund.

Accepted Answer

A) balanced 
B) equity income 
C) industry 
D) sector 
E) money market 
A) balanced 
B) equity income 
C) industry 
D) sector 
E) money market

Question 6

In a newspaper quotation,the letter "p" means a 12b-1 distribution fee is charged.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Why do investors purchase mutual funds instead of purchasing stocks,bonds,or other investments on their own?

Accepted Answer

The major reasons why investors purchase

Question 9

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open- end mutual fund.

Accepted Answer

To purchase shares in an open-end mutual

Question 10

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 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is false?

Accepted Answer

A) The purpose of investing in a closed-end,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) All of the above statements are truE. 
A) The purpose of investing in a closed-end,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) All of the above statements are truE.

Question 14

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 15

A mutual fund in which investors pay a commission every time they purchase shares 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 16

There are about _____ exchange-traded funds.

Accepted Answer

A) 25 
B) 50 
C) 150 
D) 775 
E) 1,000 
A) 25 
B) 50 
C) 150 
D) 775 
E) 1,000

Question 17

A no-load fund is a mutual fund in which no sales charge is paid by the individual investor to buy or sell shares.

Accepted Answer

A) True 
 B)False

Question 18

Which one of the following statements is false?

Accepted Answer

A) The responsibility for choosing the right mutual fund rests with the individual investor. 
B) Professional fund managers do make mistakes. 
C) Although investing in mutual funds provides professional management,individual investors should continually evaluate their mutual fund investments. 
D) There is no need to evaluate mutual fund investments because investment companies hire the best professional managers they can to manage their funds. 
E) Individual investors should be involved in choosing a mutual fund because they know how the objectives of a mutual fund match their own investment objectives. 
A) The responsibility for choosing the right mutual fund rests with the individual investor. 
B) Professional fund managers do make mistakes. 
C) Although investing in mutual funds provides professional management,individual investors should continually evaluate their mutual fund investments. 
D) There is no need to evaluate mutual fund investments because investment companies hire the best professional managers they can to manage their funds. 
E) Individual investors should be involved in choosing a mutual fund because they know how the objectives of a mutual fund match their own investment objectives.

Question 19

According to The Investment Company website,the percentage of investors who purchased their first fund through a retirement plan is:

Accepted Answer

A) less than 10%. 
B) less than 25%. 
C) less than 50%. 
D) more than 50%. 
E) more than 90%. 
A) less than 10%. 
B) less than 25%. 
C) less than 50%. 
D) more than 50%. 
E) more than 90%.

Question 20

As a shareholder in a mutual fund,you should receive a(n):

Accepted Answer

A) annual report. 
B) 12b-1 report. 
C) annual prospectus. 
D) annual summary report from the president of the investment company. 
E) copy of the annual mutual funds report containing a summary of the professional advisory services comments. 
A) annual report. 
B) 12b-1 report. 
C) annual prospectus. 
D) annual summary report from the president of the investment company. 
E) copy of the annual mutual funds report containing a summary of the professional advisory services comments.

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

Martin Campbell wants to invest in mutual funds,but is also worried about diversification.Which fund would you recommend to him?

Asset allocation funds invest in various asset classes including stocks,bonds,fixed-income securities,and money market instruments.

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

A mutual fund that invests in stocks issued by companies with a long history of paying dividends is called a(n)____________ fund.

In a newspaper quotation,the letter "p" means a 12b-1 distribution fee is charged.

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

Why do investors purchase mutual funds instead of purchasing stocks,bonds,or other investments on their own?

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open- end mutual fund.

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

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?

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

Which of the following statements is false?

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

A mutual fund in which investors pay a commission every time they purchase shares is called a(n)____________ fund.

There are about _____ exchange-traded funds.

A no-load fund is a mutual fund in which no sales charge is paid by the individual investor to buy or sell shares.

Which one of the following statements is false?

According to The Investment Company website,the percentage of investors who purchased their first fund through a retirement plan is:

As a shareholder in a mutual fund,you should receive a(n):

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

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

Martin Campbell wants to invest in mutual funds,but is also worried about diversification.Which fund would you recommend to him?

Asset allocation funds invest in various asset classes including stocks,bonds,fixed-income securities,and money market instruments.

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

A mutual fund that invests in stocks issued by companies with a long history of paying dividends is called a(n)____________ fund.

In a newspaper quotation,the letter "p" means a 12b-1 distribution fee is charged.

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

Why do investors purchase mutual funds instead of purchasing stocks,bonds,or other investments on their own?

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open- end mutual fund.

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

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?

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

Which of the following statements is false?

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

A mutual fund in which investors pay a commission every time they purchase shares is called a(n)____________ fund.

There are about _____ exchange-traded funds.

A no-load fund is a mutual fund in which no sales charge is paid by the individual investor to buy or sell shares.

Which one of the following statements is false?

According to The Investment Company website,the percentage of investors who purchased their first fund through a retirement plan is:

As a shareholder in a mutual fund,you should receive a(n):

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