Question 1

At issue,offering prices of open-end funds will often be

Accepted Answer

A) less than NAV due to loads and commissions. 
B) greater than NAV due to loads and commissions. 
C) less than NAV due to limited demand. 
D) greater than NAV due to excess demand. 
E) less than or greater than NAV with no apparent pattern. 
A) less than NAV due to loads and commissions. 
B) greater than NAV due to loads and commissions. 
C) less than NAV due to limited demand. 
D) greater than NAV due to excess demand. 
E) less than or greater than NAV with no apparent pattern.

Question 2

A mutual fund had NAV per share of $23.00 on January 1,2009.On December 31 of the same year the fund's NAV was $23.15.Income distributions were $0.63 and the fund had capital gain distributions of $1.26.Without considering taxes and transactions costs,what rate of return did an investor receive on the fund last year?

Accepted Answer

A) 11.26% 
B) 10.54% 
C) 8.87% 
D) 8.26% 
E) 9.63% 
A) 11.26% 
B) 10.54% 
C) 8.87% 
D) 8.26% 
E) 9.63%

Question 3

A mutual fund had average daily assets of $4.7 billion in 2009.The fund sold $2.2 billion worth of stock and purchased $3.6 billion worth of stock during the year.The fund's turnover ratio is ____________.

Accepted Answer

A) 37.5% 
B) 22.6% 
C) 15.3% 
D) 46.8% 
E) 20.7% 
A) 37.5% 
B) 22.6% 
C) 15.3% 
D) 46.8% 
E) 20.7%

Question 4

You purchased shares of a mutual fund at a price of $20 per share at the beginning of the year and paid a front-end load of 6.0%.If the securities in which the fund invested increased in value by 10% during the year,and the fund's expense ratio was 1.5%,your return if you sold the fund at the end of the year would be ____________%.

Accepted Answer

A) 1.99 
B) 2.32 
C) 1.65 
D) 2.06 
E) None of the above 
A) 1.99 
B) 2.32 
C) 1.65 
D) 2.06 
E) None of the above

Question 5

A mutual fund had NAV per share of $16.75 on January 1,2009.On December 31 of the same year the fund's rate of return for the year was 26.6%.Income distributions were $1.79 and the fund had capital gain distributions of $2.80.Without considering taxes and transactions costs,what ending NAV would you calculate?

Accepted Answer

A) $17.44 
B) $13.28 
C) $14.96 
D) $17.25 
E) $16.62 
A) $17.44 
B) $13.28 
C) $14.96 
D) $17.25 
E) $16.62

Question 6

Closed end funds are frequently issued at a ______ to NAV and subsequently trade at a __________ to NAV.

Accepted Answer

A) discount, discount 
B) discount, premium 
C) premium, premium 
D) premium, discount 
E) No consistent relationship has been observed. 
A) discount, discount 
B) discount, premium 
C) premium, premium 
D) premium, discount 
E) No consistent relationship has been observed.

Question 7

Which one of the following statements regarding closed-end mutual funds is false?

Accepted Answer

A) The funds always trade at a discount from NAV. 
B) The funds redeem shares at their net asset value. 
C) The funds offer investors professional management. 
D) A and B. 
E) None of the above. 
A) The funds always trade at a discount from NAV. 
B) The funds redeem shares at their net asset value. 
C) The funds offer investors professional management. 
D) A and B. 
E) None of the above.

Question 8

Assume that you purchased 200 shares of Super Performing mutual fund at a net asset value of $21 per share.During the year you received dividend income distributions of $1.50 per share and capital gains distributions of $2.85 per share.At the end of the year the shares had a net asset value of $23 per share.What was your rate of return on this investment?

Accepted Answer

A) 30.24% 
B) 25.37% 
C) 27.19% 
D) 22.44% 
E) 29.18% 
A) 30.24% 
B) 25.37% 
C) 27.19% 
D) 22.44% 
E) 29.18%

Question 9

A mutual fund had year-end assets of $700,000,000 and liabilities of $7,000,000.There were 40,150,000 shares in the fund at year-end.What was the mutual fund's Net Asset Value?

Accepted Answer

A) $9.63 
B) $57.71 
C) $16.42 
D) $17.87 
E) $17.26 
A) $9.63 
B) $57.71 
C) $16.42 
D) $17.87 
E) $17.26

Question 10

Which of the following statements about Real Estate Investment Trusts is true?

Accepted Answer

A) REITs invest in real estate or loans secured by real estate. 
B) REITs raise capital by borrowing from banks and issuing mortgages. 
C) REITs are similar to open-end funds, with shares redeemable at NAV. 
D) All of the above are true. 
E) Both A and B are true. 
A) REITs invest in real estate or loans secured by real estate. 
B) REITs raise capital by borrowing from banks and issuing mortgages. 
C) REITs are similar to open-end funds, with shares redeemable at NAV. 
D) All of the above are true. 
E) Both A and B are true.

Question 11

You purchased shares of a mutual fund at a price of $12 per share at the beginning of the year and paid a front-end load of 4.75%.If the securities in which the fund invested increased in value by 9% during the year,and the fund's expense ratio was 1.5%,your return if you sold the fund at the end of the year would be ____________%.

Accepted Answer

A) 4.75 
B) 3.54 
C) 2.65 
D) 2.39 
E) None of the above 
A) 4.75 
B) 3.54 
C) 2.65 
D) 2.39 
E) None of the above

At issue,offering prices of open-end funds will often be

A mutual fund had average daily assets of $4.7 billion in 2009.The fund sold $2.2 billion worth of stock and purchased $3.6 billion worth of stock during the year.The fund's turnover ratio is ____________.

Closed end funds are frequently issued at a to NAV and subsequently trade at a ____ to NAV.

Which one of the following statements regarding closed-end mutual funds is false?

A mutual fund had year-end assets of $700,000,000 and liabilities of $7,000,000.There were 40,150,000 shares in the fund at year-end.What was the mutual fund's Net Asset Value?

Which of the following statements about Real Estate Investment Trusts is true?

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Introduction to Risk,return,and the Historical Record

Risk Aversion and Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

Filters

Exam 4: Mutual Funds and Other Investment Companies

At issue,offering prices of open-end funds will often be

A mutual fund had average daily assets of $4.7 billion in 2009.The fund sold $2.2 billion worth of stock and purchased $3.6 billion worth of stock during the year.The fund's turnover ratio is ____________.

Closed end funds are frequently issued at a ______ to NAV and subsequently trade at a __________ to NAV.

Which one of the following statements regarding closed-end mutual funds is false?

A mutual fund had year-end assets of $700,000,000 and liabilities of $7,000,000.There were 40,150,000 shares in the fund at year-end.What was the mutual fund's Net Asset Value?

Which of the following statements about Real Estate Investment Trusts is true?

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Introduction to Risk,return,and the Historical Record

Risk Aversion and Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

Filters

Closed end funds are frequently issued at a to NAV and subsequently trade at a ____ to NAV.