Exam 13: Investing in Mutual Funds

When one investment company manages a group of mutual funds, it is called a(n):

Morgan Phelps just purchased 200 shares in the Green Fidelity Fund. The purchase cost for each share was $40. If this fund charges a 6 percent load, what is the total amount of commission he will pay the investment company?

Typically, you must invest at least $250 to open a mutual fund account.

While mutual fund income dividends are subject to taxation, capital gain distributions are not subject to taxation.

An investment company sponsoring a mutual fund must furnish shareholders a prospectus each year.

To purchase shares in an open-end fund, you may use four options: regular accounts, voluntary savings plans, contractual savings plans and reinvestment plans.

A mutual fund that invests in the common stocks of companies in the same industry is called a(n) ____________ fund.

A mutual fund that aims for capital gains is:

Which of the following is not a true statement?

A mutual fund that requires investors to make regular purchases over a specified period of time is called a

The diversification of mutual funds spells safety, because an occasional loss incurred with one investment is usually offset by gains from other investments.

Capital gain distributions result when you decide to sell shares in a mutual fund at a price higher than you paid.

In order to sell shares in a closed-end fund, an investor must wait until the investment company is ready to repurchase the investor's shares.

Because of professional management, there is no need for the individual investor to evaluate a mutual fund investment.

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

Marisa Callaghan just purchased 100 shares in the All-Inclusive Fidelity Fund. The purchase cost for each share was $30. If this fund charges a 6 percent load, what is the total amount of commission she will pay the investment company?

In a newspaper quotation, which of the following letters would indicate if a mutual fund has a redemption charge?

For a load fund, the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

For a load fund, the average commission usually ranges between 3 and 5 percent of the purchase price for investments under $10,000.

Index funds are bought at end-of-day prices.