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

Eveningstar open-end fund has 1,000 shares outstanding and has the following assets in its portfolio: 100 shares of Procter & Gamble (P&G)priced at $30.00,300 shares of Intel priced at $50.00 and 200 shares of Microsoft priced at $60.00.The Morningstar closed-end fund has the following stocks in its portfolio: 300 shares of P&G and 300 shares of Microsoft.It has a total of 500 shares outstanding. -What is the NAV of both funds?

Directed brokerage is a trading abuse where a mutual fund and a brokerage agree to promote sales of certain funds in exchange for orders of specific stocks and bonds.

Although exchange traded funds (ETFs)can be traded throughout the day,they cannot be purchased on margin or sold short.

A mutual fund that charges investors a fee similar to a commission charge is called a

Which of the following observations is true of open-end mutual funds?

U.S.mutual fund companies have made significant progress in entering Japan and Europe.

For mutual funds outside the United States,total amounts invested in this fund category topped the list in 2015.

Retirement funds under management of mutual funds are approximately what percentage of total mutual fund assets?

To be deemed "accredited" and able to invest in a hedge fund,an investor must have

As of 2015,Commercial banks are not allowed to own or invest in mutual funds.

Match the following pieces of legislation with the function achieved by each regulation as stated in the question. -Exempts mutual fund sellers from oversight by state securities regulators.

As of 2015,hedge fund managers with assets more than $100 million are required to register with the SEC.

Fees of load funds that are used to cover the costs of trading in securities are called 12b-1 fees.

The Securities Act of 1933 requires that a mutual fund furnish full and accurate information on all financial and corporate matters to prospective fund purchasers.

Eveningstar open-end fund has 1,000 shares outstanding and has the following assets in its portfolio: 100 shares of Procter & Gamble (P&G)priced at $30.00,300 shares of Intel priced at $50.00 and 200 shares of Microsoft priced at $60.00.The Morningstar closed-end fund has the following stocks in its portfolio: 300 shares of P&G and 300 shares of Microsoft.It has a total of 500 shares outstanding. -Suppose Morningstar issues another 250 shares and purchases shares of Intel with the funds.What is its new NAV of Morningstar? (Assume the NAV found before the price change in P&G and Microsoft in the previous question).

Mutual funds that purchase Treasury bills,bank negotiable certificates of deposit,commercial paper,and other short-term securities would be classified as

Which of the following hedge fund objectives would be classified under the "risk avoidance" category?

Class C shares of a mutual fund usually convert to Class A shares after some length of time which may be as long as 6 to 8 years.

Mutual funds are financial intermediaries that invest in diversified portfolios of assets.

Mutual funds are required to hire chief compliance officers whose job is to monitor whether the mutual fund company follows exchange and regulatory rules.