Exam 5: Financial Services: Mutual Fund and Hedge Fund Companies

Match the following pieces of legislation with the function achieved by each regulation as stated in the question. -Regulates the activities of mutual fund advisors.

Since 2002,the amount of assets invested in load funds have exceeded those invested in no-load funds.

A mutual fund has the following share characteristics: Shares are offered at the NAV with no front-end load,a 12b-1 fee of 1 percent is charged,a back-end load of 1 percent is charged only if the shares are sold by the investor within one year of purchase,and the shares do not convert to any other class of shares.These shares would be classified as

Match the following pieces of legislation with the function achieved by each regulation as stated in the question. -Requires mutual funds to develop mechanisms and procedures to avoid insider trading abuses.

As compared to purchasing an individual stock,a no-load mutual fund investor will usually get

A mutual fund objective statement provides general information about the types of securities a mutual fund will hold as assets.

Match the following pieces of legislation with the function achieved by each regulation as stated in the question. -Sets rules to prevent conflicts of interest,fraud,and excessive fees or charges for fund shares.

In 2015 there were approximately _______ exchange traded funds (ETFs)in existence with combined assets valued at _______.

The Investment Advisors Act of 1940 sets out rules to prevent conflicts of interest,fraud,and excessive fees or charges for mutual fund shares.

Which of the following is one of the characteristics of household mutual fund owners as of 2015?

Mutual fund share distributions and transactions are supervised and cleared by the National Mutual Fund Association (NMFA).

When an investor purchases shares in an exchange traded fund (ETF),he or she is interacting directly with the fund.

The type of abusive activity that involves cases where investors were able to buy or sell mutual fund shares long after the price had been set each day is

Hedge funds are forbidden to sell a security short or to engage in arbitrage trading.

The long-term mutual fund sector includes

The front-end load on these type of shares is charged on new sales and is not generally incurred when these shares are exchanged for another mutual fund within the same fund family.

The Securities Act of 1933 sets rules and procedures regarding a mutual fund's prospectus sent to potential investors.

Which of the following observations concerning hedge funds is NOT true?

Open-end mutual funds are the major type of mutual funds.

It is estimated that 75 percent of all hedge funds are located in