Question 1

Fred wants to invest in a "no-load" fund. This means that the fund has no 12b-1 fees.

Accepted Answer

A) True 
 B)False

Question 2

Which type of fund has the prices determined by factors of supply and demand like the prices of a stock?

Accepted Answer

A)  Closed-end fund 
B)  SEC government fund 
C)  Net asset value fund 
D)  No-load fund 
E)  Open-end fund 
A)  Closed-end fund 
B)  SEC government fund 
C)  Net asset value fund 
D)  No-load fund 
E)  Open-end fund

Question 3

Which of the following is true about mutual funds and taxes?

Accepted Answer

A)  Capital gain distributions are taxed as short-term capital gains. 
B)  Income dividends are taxed quarterly. 
C)  Investment companies are required to send each shareholder a year-end statement that specifies how much each received in income dividends and capital gain distributions. 
D)  Capital gains distributions are not reported on your federal tax return. 
E)  Taxes can be eliminated if you hold your mutual fund shares in your 401(k) retirement account. 
A)  Capital gain distributions are taxed as short-term capital gains. 
B)  Income dividends are taxed quarterly. 
C)  Investment companies are required to send each shareholder a year-end statement that specifies how much each received in income dividends and capital gain distributions. 
D)  Capital gains distributions are not reported on your federal tax return. 
E)  Taxes can be eliminated if you hold your mutual fund shares in your 401(k) retirement account.

Question 4

An example of a lifecycle fund is a fund that

Accepted Answer

A)  Assists investors with planning for retirement by a specific date. 
B)  Initially invests in conservative securities, then changes to invest in more risk-oriented securities as time goes by. 
C)  Invests in shares of other mutual funds in order to increase diversification and asset allocation. 
D)  Has principal protection as its main objective. 
E)  None of these is an example of a lifecycle fund. 
A)  Assists investors with planning for retirement by a specific date. 
B)  Initially invests in conservative securities, then changes to invest in more risk-oriented securities as time goes by. 
C)  Invests in shares of other mutual funds in order to increase diversification and asset allocation. 
D)  Has principal protection as its main objective. 
E)  None of these is an example of a lifecycle fund.

Question 5

What percentage of all mutual funds are closed-end funds?

Accepted Answer

A)  6% 
B)  13% 
C)  36% 
D)  85% 
E)  93% 
A)  6% 
B)  13% 
C)  36% 
D)  85% 
E)  93%

Question 6

A newspaper will provide more complete coverage of mutual funds compared to other sources.

Accepted Answer

A) True 
 B)False

Question 7

Sally wants to invest in a fund that invests only in stock. Which of the following will meet her needs?

Accepted Answer

A)  Asset allocation funds 
B)  Balance funds 
C)  Junk bond funds 
D)  Midcap funds 
E)  Short-term corporate bond funds 
A)  Asset allocation funds 
B)  Balance funds 
C)  Junk bond funds 
D)  Midcap funds 
E)  Short-term corporate bond funds

Question 8

Earnings paid to shareholders that are not related to the sale of securities in the fund's portfolio are called

Accepted Answer

A)  Capital gain distributions. 
B)  Income dividends. 
C)  Capital gains. 
D)  Mutual fund money. 
E)  Fund taxes. 
A)  Capital gain distributions. 
B)  Income dividends. 
C)  Capital gains. 
D)  Mutual fund money. 
E)  Fund taxes.

Question 9

For individuals, stocks and bonds ar a better investment choice than mutual funds, because money is pooled from many investors for stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 10

How is an ETF similar to a closed-end fund?

Accepted Answer

A)  Shares can be traded on a securities exchange. 
B)  An investor can purchase as little as one share of a fund. 
C)  Prices for shares are determined by supply and demand, the value of stocks and other investments contained in the fund's portfolio, and by investor expectations. 
D)  Shares can be traded in the over-the-counter market. 
E)  All of these are correct. 
A)  Shares can be traded on a securities exchange. 
B)  An investor can purchase as little as one share of a fund. 
C)  Prices for shares are determined by supply and demand, the value of stocks and other investments contained in the fund's portfolio, and by investor expectations. 
D)  Shares can be traded in the over-the-counter market. 
E)  All of these are correct.

Question 11

A capital gain distribution is the profit that results from an increase in value when the investors sell their shares in a fund.

Accepted Answer

A) True 
 B)False

Question 12

Val wants to invest in a fund whose primary objective is to conserve principal, provide income, and provide long-term growth. Which of the following will best meet her needs?

Accepted Answer

A)  Cyclical funds 
B)  Balanced funds 
C)  Junk bond funds 
D)  Midcap funds 
E)  Short-term corporate bond funds 
A)  Cyclical funds 
B)  Balanced funds 
C)  Junk bond funds 
D)  Midcap funds 
E)  Short-term corporate bond funds

Question 13

Which class of shares does not impose a sales load or contingent deferred sales fee but charges a higher 12b-1 fee than the other classes?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  K 
E)  Q 
A)  A 
B)  B 
C)  C 
D)  K 
E)  Q

Question 14

Many mutual funds charge a commission every time shares are purchased by investors. These are called

Accepted Answer

A)  Load funds. 
B)  Closed-end funds. 
C)  Exchange-traded funds. 
D)  Net asset value funds. 
E)  Open-end funds. 
A)  Load funds. 
B)  Closed-end funds. 
C)  Exchange-traded funds. 
D)  Net asset value funds. 
E)  Open-end funds.

Question 15

A load fund is allowed to collect a sales charge (commission) as high as ___ of the purchase price for investments.

Accepted Answer

A)  0%. 
B)  2%. 
C)  3-5%. 
D)  8.5%. 
E)  11.5%. 
A)  0%. 
B)  2%. 
C)  3-5%. 
D)  8.5%. 
E)  11.5%.

Question 16

A no-load mutual fund

Accepted Answer

A)  May allow investors to pay a sales charge. 
B)  Charges commission when you buy shares. 
C)  Uses salespeople to sell the funds. 
D)  Is available only via the Internet. 
E)  Can charge a 12b-1 fee of up to 0.25% of its assets. 
A)  May allow investors to pay a sales charge. 
B)  Charges commission when you buy shares. 
C)  Uses salespeople to sell the funds. 
D)  Is available only via the Internet. 
E)  Can charge a 12b-1 fee of up to 0.25% of its assets.

Question 17

Which of the following is a fund that invests in the stocks or securities contained in a specific stock or securities index?

Accepted Answer

A)  Closed-end fund 
B)  Exchange-traded fund 
C)  Net asset value fund 
D)  No-load fund 
E)  Open-end fund 
A)  Closed-end fund 
B)  Exchange-traded fund 
C)  Net asset value fund 
D)  No-load fund 
E)  Open-end fund

Question 18

When you sell your shares in a mutual fund, you may receive a profit that results from an increase in value called

Accepted Answer

A)  Capital gain distribution. 
B)  Income dividend. 
C)  Capital gain. 
D)  Mutual fund money. 
E)  Fund taxes. 
A)  Capital gain distribution. 
B)  Income dividend. 
C)  Capital gain. 
D)  Mutual fund money. 
E)  Fund taxes.

Question 19

Professional advisory services provide research on mutual funds in a report that includes all of the following areas except

Accepted Answer

A)  A historical profile. 
B)  Statistical information. 
C)  Performance, risk, and portfolio analysis. 
D)  Summary of the analyst's research. 
E)  All of these are included by professional advisory services. 
A)  A historical profile. 
B)  Statistical information. 
C)  Performance, risk, and portfolio analysis. 
D)  Summary of the analyst's research. 
E)  All of these are included by professional advisory services.

Question 20

The difference between a global stock fund and an international fund is that the global stock fund invests in companies throughout the world, including the United States, whereas the international fund invests outside the United States.

Accepted Answer

A) True 
 B)False

Fred wants to invest in a "no-load" fund. This means that the fund has no 12b-1 fees.

Which type of fund has the prices determined by factors of supply and demand like the prices of a stock?

Which of the following is true about mutual funds and taxes?

An example of a lifecycle fund is a fund that

What percentage of all mutual funds are closed-end funds?

A newspaper will provide more complete coverage of mutual funds compared to other sources.

Sally wants to invest in a fund that invests only in stock. Which of the following will meet her needs?

Earnings paid to shareholders that are not related to the sale of securities in the fund's portfolio are called

For individuals, stocks and bonds ar a better investment choice than mutual funds, because money is pooled from many investors for stocks and bonds.

How is an ETF similar to a closed-end fund?

A capital gain distribution is the profit that results from an increase in value when the investors sell their shares in a fund.

Val wants to invest in a fund whose primary objective is to conserve principal, provide income, and provide long-term growth. Which of the following will best meet her needs?

Which class of shares does not impose a sales load or contingent deferred sales fee but charges a higher 12b-1 fee than the other classes?

Many mutual funds charge a commission every time shares are purchased by investors. These are called

A load fund is allowed to collect a sales charge (commission) as high as ___ of the purchase price for investments.

A no-load mutual fund

Which of the following is a fund that invests in the stocks or securities contained in a specific stock or securities index?

When you sell your shares in a mutual fund, you may receive a profit that results from an increase in value called

Professional advisory services provide research on mutual funds in a report that includes all of the following areas except

The difference between a global stock fund and an international fund is that the global stock fund invests in companies throughout the world, including the United States, whereas the international fund invests outside the United States.

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Starting Early: Retirement and Estate Planning

Filters

Exam 13: Investing in Mutual Funds

Fred wants to invest in a "no-load" fund. This means that the fund has no 12b-1 fees.

Which type of fund has the prices determined by factors of supply and demand like the prices of a stock?

Which of the following is true about mutual funds and taxes?

An example of a lifecycle fund is a fund that

What percentage of all mutual funds are closed-end funds?

A newspaper will provide more complete coverage of mutual funds compared to other sources.

Sally wants to invest in a fund that invests only in stock. Which of the following will meet her needs?

Earnings paid to shareholders that are not related to the sale of securities in the fund's portfolio are called

For individuals, stocks and bonds ar a better investment choice than mutual funds, because money is pooled from many investors for stocks and bonds.

How is an ETF similar to a closed-end fund?

A capital gain distribution is the profit that results from an increase in value when the investors sell their shares in a fund.

Val wants to invest in a fund whose primary objective is to conserve principal, provide income, and provide long-term growth. Which of the following will best meet her needs?

Which class of shares does not impose a sales load or contingent deferred sales fee but charges a higher 12b-1 fee than the other classes?

Many mutual funds charge a commission every time shares are purchased by investors. These are called

A load fund is allowed to collect a sales charge (commission) as high as ___ of the purchase price for investments.

A no-load mutual fund

Which of the following is a fund that invests in the stocks or securities contained in a specific stock or securities index?

When you sell your shares in a mutual fund, you may receive a profit that results from an increase in value called

Professional advisory services provide research on mutual funds in a report that includes all of the following areas except

The difference between a global stock fund and an international fund is that the global stock fund invests in companies throughout the world, including the United States, whereas the international fund invests outside the United States.

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Starting Early: Retirement and Estate Planning

Filters