Question 1

The investment philosophy of ETFs is ________.

Accepted Answer

A) pro-active management 
B) demi-active management 
C) passive management 
D) active management 
A) pro-active management 
B) demi-active management 
C) passive management 
D) active management

Question 2

Advantages of investment companies to investors include all but which one of the following?

Accepted Answer

A) Record keeping and administration 
B) Low-cost diversification 
C) Professional management 
D) Guaranteed rates of return 
A) Record keeping and administration 
B) Low-cost diversification 
C) Professional management 
D) Guaranteed rates of return

Question 3

Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the Net Asset Value (NAV) of these shares?

Accepted Answer

A) $12.00 
B) $9.00 
C) $10.00 
D) $1.00 
A) $12.00 
B) $9.00 
C) $10.00 
D) $1.00

Question 4

Assume that you have recently purchased 100 shares in an investment company. Upon examining the balance sheet, you note the firm is reporting $225 million in assets, $30 million in liabilities, and 10 million shares outstanding. What is the Net Asset Value (NAV) of these shares?

Accepted Answer

A) $25.50 
B) $22.50 
C) $19.50 
D) $1.95 
A) $25.50 
B) $22.50 
C) $19.50 
D) $1.95

Question 5

The greatest percentage of growth fund assets are invested in ________.

Accepted Answer

A) bond funds 
B) equity funds 
C) hybrid funds 
D) money market funds 
A) bond funds 
B) equity funds 
C) hybrid funds 
D) money market funds

Question 6

________ is a false statement regarding open-end funds.

Accepted Answer

A) 'They offer investors a guaranteed rate of return' 
B) 'They offer investors a well-diversified portfolio' 
C) 'They redeem shares at their net asset value' 
D) 'They offer low-cost diversification 
A) 'They offer investors a guaranteed rate of return' 
B) 'They offer investors a well-diversified portfolio' 
C) 'They redeem shares at their net asset value' 
D) 'They offer low-cost diversification

Question 7

Rank the following fund categories from most risky to least risky:
I. Equity growth fund
II. Balanced fund
III. Sector fund
IV. Money market fund

Accepted Answer

A) IV, I, III, II 
B) III, II, IV, I 
C) I, II, III, IV 
D) III, I, II, IV 
A) IV, I, III, II 
B) III, II, IV, I 
C) I, II, III, IV 
D) III, I, II, IV

Question 8

Compared with managed funds, ETFs ________.

Accepted Answer

A) are tax exempt 
B) are free from capital gains taxes 
C) offer a potential tax advantage 
D) are tax inefficient 
A) are tax exempt 
B) are free from capital gains taxes 
C) offer a potential tax advantage 
D) are tax inefficient

Question 9

Managed funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector, are called ________.

Accepted Answer

A) asset allocation funds 
B) balanced funds 
C) index funds 
D) income funds 
A) asset allocation funds 
B) balanced funds 
C) index funds 
D) income funds

Question 10

The contribution fee of managed funds is generally around ________ of the value of the investment.

Accepted Answer

A) 2% 
B) 3% 
C) 4% 
D) 5% 
A) 2% 
B) 3% 
C) 4% 
D) 5%

Question 11

Unlisted investments are often called ________.

Accepted Answer

A) Unit investment trusts 
B) Open-end funds 
C) Closed-end funds 
D) REITs 
A) Unit investment trusts 
B) Open-end funds 
C) Closed-end funds 
D) REITs

Question 12

Australian Real Estate Investment Trust is an example of ________.

Accepted Answer

A) commingled pool 
B) unlisted investments 
C) listed investments 
D) money market fund 
A) commingled pool 
B) unlisted investments 
C) listed investments 
D) money market fund

Question 13

A mutual fund has total assets outstanding of $69 million. During the year the fund bought and sold assets equal to $17.25 million. This fund's turnover rate was ________.

Accepted Answer

A) 25.00% 
B) 28.50% 
C) 18.63% 
D) 33.40% 
A) 25.00% 
B) 28.50% 
C) 18.63% 
D) 33.40%

Question 14

Which of the following is not a type of managed investment company?

Accepted Answer

A) Unit investment trusts 
B) Closed-end funds 
C) Open-end funds 
D) Hedge funds 
A) Unit investment trusts 
B) Closed-end funds 
C) Open-end funds 
D) Hedge funds

Question 15

The ratio of trading activity of a portfolio to the assets of the portfolio, is called ________.

Accepted Answer

A) the reinvestment ratio 
B) the trading rate 
C) the portfolio turnover 
D) the tax yield 
A) the reinvestment ratio 
B) the trading rate 
C) the portfolio turnover 
D) the tax yield

Question 16

Balanced funds hold both ________.

Accepted Answer

A) ETFs and A-REITs 
B) money market securities and real estates 
C) equities and commodity derivatives 
D) equities and fixed-income securities 
A) ETFs and A-REITs 
B) money market securities and real estates 
C) equities and commodity derivatives 
D) equities and fixed-income securities

Question 17

The main investments of growth funds are ________.

Accepted Answer

A) fixed-income securities 
B) real estates 
C) commodity derivatives 
D) equities securities 
A) fixed-income securities 
B) real estates 
C) commodity derivatives 
D) equities securities

Question 18

Life-cycle funds are ________.

Accepted Answer

A) growth funds 
B) closed-end funds 
C) balanced funds 
D) stable funds 
A) growth funds 
B) closed-end funds 
C) balanced funds 
D) stable funds

Question 19

Consider a mutual fund with $300 million in assets at the start of the year, and 12 million shares outstanding. If the gross return on assets is 18% and the total expense ratio is 2% of the year end value, what is the rate of return on the fund?

Accepted Answer

A) 15.64% 
B) 16.00% 
C) 17.25% 
D) 17.50% 
A) 15.64% 
B) 16.00% 
C) 17.25% 
D) 17.50%

Question 20

The assets of a managed fund are $25 million. The liabilities are $4 million. If the fund has 700 000 shares outstanding and pays a $3 dividend, what is the dividend yield?

Accepted Answer

A) 5% 
B) 10% 
C) 15% 
D) 20% 
A) 5% 
B) 10% 
C) 15% 
D) 20%

The investment philosophy of ETFs is ________.

Advantages of investment companies to investors include all but which one of the following?

Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the Net Asset Value (NAV) of these shares?

Assume that you have recently purchased 100 shares in an investment company. Upon examining the balance sheet, you note the firm is reporting $225 million in assets, $30 million in liabilities, and 10 million shares outstanding. What is the Net Asset Value (NAV) of these shares?

The greatest percentage of growth fund assets are invested in ________.

________ is a false statement regarding open-end funds.

Rank the following fund categories from most risky to least risky: I. Equity growth fund II. Balanced fund III. Sector fund IV. Money market fund

Compared with managed funds, ETFs ________.

Managed funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector, are called ________.

The contribution fee of managed funds is generally around ________ of the value of the investment.

Unlisted investments are often called ________.

Australian Real Estate Investment Trust is an example of ________.

A mutual fund has total assets outstanding of $69 million. During the year the fund bought and sold assets equal to $17.25 million. This fund's turnover rate was ________.

Which of the following is not a type of managed investment company?

The ratio of trading activity of a portfolio to the assets of the portfolio, is called ________.

Balanced funds hold both ________.

The main investments of growth funds are ________.

Life-cycle funds are ________.

Consider a mutual fund with $300 million in assets at the start of the year, and 12 million shares outstanding. If the gross return on assets is 18% and the total expense ratio is 2% of the year end value, what is the rate of return on the fund?

The assets of a managed fund are $25 million. The liabilities are $4 million. If the fund has 700 000 shares outstanding and pays a $3 dividend, what is the dividend yield?

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Risk and Return: Past and Prologue

Efficient Diversification

Capital Pricing and Arbitrage Pricing Theory

The Efficient Market Hypothesis and Behavioral Finance

Bond Prices and Yields

Managing Bond Portfolios

Equity Valuation

Macroeconomic and Industry Analysis

Financial Statement Analysis

Options and Risk Management

Futures and Risk Management

Investors and the Investment Process

Hedge Funds

Portfolio Performance Evaluation

Filters

Exam 4: Managed Funds and Other Investment Companies

The investment philosophy of ETFs is ________.

Advantages of investment companies to investors include all but which one of the following?

Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the Net Asset Value (NAV) of these shares?

Assume that you have recently purchased 100 shares in an investment company. Upon examining the balance sheet, you note the firm is reporting $225 million in assets, $30 million in liabilities, and 10 million shares outstanding. What is the Net Asset Value (NAV) of these shares?

The greatest percentage of growth fund assets are invested in ________.

________ is a false statement regarding open-end funds.

Rank the following fund categories from most risky to least risky: I. Equity growth fund II. Balanced fund III. Sector fund IV. Money market fund

Compared with managed funds, ETFs ________.

Managed funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector, are called ________.

The contribution fee of managed funds is generally around ________ of the value of the investment.

Unlisted investments are often called ________.

Australian Real Estate Investment Trust is an example of ________.

A mutual fund has total assets outstanding of $69 million. During the year the fund bought and sold assets equal to $17.25 million. This fund's turnover rate was ________.

Which of the following is not a type of managed investment company?

The ratio of trading activity of a portfolio to the assets of the portfolio, is called ________.

Balanced funds hold both ________.

The main investments of growth funds are ________.

Life-cycle funds are ________.

Consider a mutual fund with $300 million in assets at the start of the year, and 12 million shares outstanding. If the gross return on assets is 18% and the total expense ratio is 2% of the year end value, what is the rate of return on the fund?

The assets of a managed fund are $25 million. The liabilities are $4 million. If the fund has 700 000 shares outstanding and pays a $3 dividend, what is the dividend yield?

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Risk and Return: Past and Prologue

Efficient Diversification

Capital Pricing and Arbitrage Pricing Theory

The Efficient Market Hypothesis and Behavioral Finance

Bond Prices and Yields

Managing Bond Portfolios

Equity Valuation

Macroeconomic and Industry Analysis

Financial Statement Analysis

Options and Risk Management

Futures and Risk Management

Investors and the Investment Process

Hedge Funds

Portfolio Performance Evaluation

Filters