Exam 13: Investing in Mutual Funds

Karen and Jon-Nathaniel Bild just inherited $30,000 and would like to invest the money in a conservative mutual fund. Since they have never invested in mutual funds, they ask for your help. In your own words, describe the factors that can be used to evaluate a mutual fund investment.

Which of the following statements is false?

A load fund is a mutual fund in which investors pay a commission every time they sell or buy shares.

Although mutual funds are popular among individual investors, most people do not use them as part of a registered retirement account.

The Capitalist Mutual Fund's portfolio is valued at $55 million. The fund has liabilities of $4 million, and the investment company sponsoring the fund has issued 2,400,000 shares. What is the fund's net asset value?

A mutual fund that invests in common stocks and bonds with the primary objective of earning tax-advantaged income is called a(n) ____________ fund.

A 1 to 6 percent fee that investors pay when they withdraw their investment from a mutual fund is called a(n)

In a newspaper quotation, which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

Which of the following publications does not provide readers with an annual survey of mutual funds?

The Marginal Mutual Fund's portfolio is valued at $50 million. The fund has liabilities of $10 million, and the investment company sponsoring the fund has issued 2,000,000 shares. What is the fund's net asset value per share?

For a mutual fund, the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

Even though they are under professional management, the individual investor to should evaluate a mutual fund investment.

The management fee for most mutual funds ranges between ____________ percent.

A mutual fund in which investors pay a commission every time they purchase shares is called a(n) ____________ fund.

Mutual funds that invest in smaller, lesser known companies that offer higher growth potential are referred to as dividend funds.

The net asset value for a mutual fund share is calculated by dividing the value of the fund's portfolio by the fund's liabilities.

A mutual fund in which shares are issued only when the fund is organized is called a(n) ____________ fund.

The managers of mutual funds tailor their investment portfolios to the investment objectives of their customers.

A mutual fund that seeks to make investment decisions that are guided by moral criteria that can vary from fund to fund is __________________

Income dividends and capital gain distributions are