Question 1

The KLM Mutual Fund has a net asset value of $12.34 and an offer price of $13.34.Use this information to answer the following questions.

Accepted Answer

A) 
How many shares will you receive when you invest $1,000? 
B) 
What is the immediate asset value of these shares? 
C) 
What is the load charge for this transaction? 
A) 
How many shares will you receive when you invest $1,000? 
B) 
What is the immediate asset value of these shares? 
C) 
What is the load charge for this transaction?

Question 2

In the Wall Street Journal's listing of mutual funds,a "t" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

Accepted Answer

A)  front-end load 
B)  back-end load 
C)  12b-1 fee 
D)  management fee 
E)  b and c 
A)  front-end load 
B)  back-end load 
C)  12b-1 fee 
D)  management fee 
E)  b and c

Question 3

Closed-end mutual funds always charge an upfront fee to make a purchase.

Accepted Answer

A) True 
 B)False

Question 4

A group of funds managed by a single company which offers conversion privileges is called a

Accepted Answer

A)  management group. 
B)  fund family. 
C)  brokerage group. 
D)  switched funds. 
E)  convenience group. 
A)  management group. 
B)  fund family. 
C)  brokerage group. 
D)  switched funds. 
E)  convenience group.

Question 5

____ would not be a reason for purchasing mutual funds.

Accepted Answer

A)  Diversification 
B)  Professional management 
C)  Tax advantage 
D)  Financial return 
E)  Convenience 
A)  Diversification 
B)  Professional management 
C)  Tax advantage 
D)  Financial return 
E)  Convenience

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-One type of [stock | bond] fund provides tax-free income.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 7

To be a true no-load fund,there can be a maximum ____ load and a maximum ____ 12(b)-1 fee.

Accepted Answer

A)  0%; 0.00% 
B)  0%; 0.25% 
C)  0%; 1.00% 
D)  3%; 0.25% 
E)  3%; 1.00% 
A)  0%; 0.00% 
B)  0%; 0.25% 
C)  0%; 1.00% 
D)  3%; 0.25% 
E)  3%; 1.00%

Question 8

Sector funds usually restrict their investments to specific industries.

Accepted Answer

A) True 
 B)False

Question 9

Low-load funds do not charge a commission upon initial purchase.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a source of mutual fund returns

Accepted Answer

A)  dividend income 
B)  capital gains 
C)  changes in NAV 
D)  changes in IDB 
E)  All of the above are sources of mutual fund returns 
A)  dividend income 
B)  capital gains 
C)  changes in NAV 
D)  changes in IDB 
E)  All of the above are sources of mutual fund returns

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-All funds will have [management | 12(b)-1] fees.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The NAV indicates the guaranteed price at which you could [buy | redeem] your mutual fund shares in a load fund.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 13

The NAV of an open-ended mutual fund priced at $10 be if the load is 4%?

Accepted Answer

A)  $10.40 
B)  $10.00 
C)  $9.60 
D)  $9.40 
E)  $9.20 
A)  $10.40 
B)  $10.00 
C)  $9.60 
D)  $9.40 
E)  $9.20

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-You [could | could not] switch your investments from your Fidelity income fund to another Fidelity fund by making a phone call.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 15

ETFs are set up to protect investors from capital gains taxes better than most mutual funds can.

Accepted Answer

A) True 
 B)False

Question 16

Redeeming your mutual fund shares might result in a charge called

Accepted Answer

A)  a back-end load. 
B)  a front-end load. 
C)  a redemption tax. 
D)  a management fee. 
E)  none of these. 
A)  a back-end load. 
B)  a front-end load. 
C)  a redemption tax. 
D)  a management fee. 
E)  none of these.

Question 17

An open-end investment company is commonly known as a mutual fund.

Accepted Answer

A) True 
 B)False

Question 18

If you are a mutual fund investor who needs steady income,you might take advantage of a fund's

Accepted Answer

A)  retirement plans. 
B)  exchange privileges. 
C)  automatic reinvestment plans. 
D)  systematic withdrawal plans. 
E)  none of these. 
A)  retirement plans. 
B)  exchange privileges. 
C)  automatic reinvestment plans. 
D)  systematic withdrawal plans. 
E)  none of these.

Question 19

Index funds have provided competitive rates of return because

Accepted Answer

A)  their costs are lower than other stock funds. 
B)  it is difficult to outperform the market. 
C)  they have very low turnover rates. 
D)  they are tax efficient. 
E)  all of the above. 
A)  their costs are lower than other stock funds. 
B)  it is difficult to outperform the market. 
C)  they have very low turnover rates. 
D)  they are tax efficient. 
E)  all of the above.

Question 20

A mutual fund's price per share will increase if its underlying holdings increase in value.

Accepted Answer

A) True 
 B)False

The KLM Mutual Fund has a net asset value of $12.34 and an offer price of $13.34.Use this information to answer the following questions.

In the Wall Street Journal's listing of mutual funds,a "t" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

Closed-end mutual funds always charge an upfront fee to make a purchase.

A group of funds managed by a single company which offers conversion privileges is called a

____ would not be a reason for purchasing mutual funds.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -One type of [stock | bond] fund provides tax-free income.

To be a true no-load fund,there can be a maximum load and a maximum 12(b)-1 fee.

Sector funds usually restrict their investments to specific industries.

Low-load funds do not charge a commission upon initial purchase.

Which of the following is not a source of mutual fund returns

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -All funds will have [management | 12(b)-1] fees.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The NAV indicates the guaranteed price at which you could [buy | redeem] your mutual fund shares in a load fund.

The NAV of an open-ended mutual fund priced at $10 be if the load is 4%?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You [could | could not] switch your investments from your Fidelity income fund to another Fidelity fund by making a phone call.

ETFs are set up to protect investors from capital gains taxes better than most mutual funds can.

Redeeming your mutual fund shares might result in a charge called

An open-end investment company is commonly known as a mutual fund.

If you are a mutual fund investor who needs steady income,you might take advantage of a fund's

Index funds have provided competitive rates of return because

A mutual fund's price per share will increase if its underlying holdings increase in value.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters

Exam 13: Investing in Mutual Funds

The KLM Mutual Fund has a net asset value of $12.34 and an offer price of $13.34.Use this information to answer the following questions.

In the Wall Street Journal's listing of mutual funds,a "t" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

Closed-end mutual funds always charge an upfront fee to make a purchase.

A group of funds managed by a single company which offers conversion privileges is called a

____ would not be a reason for purchasing mutual funds.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -One type of [stock | bond] fund provides tax-free income.

To be a true no-load fund,there can be a maximum ____ load and a maximum ____ 12(b)-1 fee.

Sector funds usually restrict their investments to specific industries.

Low-load funds do not charge a commission upon initial purchase.

Which of the following is not a source of mutual fund returns

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -All funds will have [management | 12(b)-1] fees.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The NAV indicates the guaranteed price at which you could [buy | redeem] your mutual fund shares in a load fund.

The NAV of an open-ended mutual fund priced at $10 be if the load is 4%?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You [could | could not] switch your investments from your Fidelity income fund to another Fidelity fund by making a phone call.

ETFs are set up to protect investors from capital gains taxes better than most mutual funds can.

Redeeming your mutual fund shares might result in a charge called

An open-end investment company is commonly known as a mutual fund.

If you are a mutual fund investor who needs steady income,you might take advantage of a fund's

Index funds have provided competitive rates of return because

A mutual fund's price per share will increase if its underlying holdings increase in value.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters

To be a true no-load fund,there can be a maximum load and a maximum 12(b)-1 fee.