Exam 17: Investing in Mutual Funds

Mutual funds that are traded on stock exchanges are called ________.

The most important expense statistic mentioned in the prospectus is

A family of mutual funds is

What would be the return on a $1,000 investment in a mutual fund whose NAV is $20? The fund has a 3 percent front-end load and during the holding period,$400 of fund distributions are reinvested at a NAV of $25 (no load applied to reinvestments).The fund is ultimately sold at a NAV of $24.(Round to the nearest tenth of a percent.) (a)14.8 percent (b)10.5 percent (c)15.3 percent (d)10.8 percent

While not all mutual funds have loads or commissions,they all have management fees and expenses that are charged to the mutual fund shareholders.

The best way to predict a mutual fund's performance is to

Because a mutual fund is already diversified with perhaps 100 or more different investments,further diversification is not recommended or necessary.

Index stock funds always contain every company's stock that make up the particular index.

Mutual funds,which sell shares directly to investors and repurchase shares investors want to sell,are called ________ funds.

A mutual fund has a beginning balance of $100 million,earns interest of $10 million,receives dividends of $15 million,and has expenses of $5 million.If 10 million shares are outstanding,what is the NAV? (a)$10.50 (b)$11.00 (c)$12.00 (d)$12.50

Which of the following is not included in the prospectus?

List the following four types of medium-term bond mutual funds in order starting with the lowest default risk to the highest: Ginnie Mae,corporate,high-yield.

Two advantages of investing in mutual funds are diversification and professional management.

Capital gains from mutual funds can be received if the mutual fund makes a profit on the shares it sells or if an individual investor realizes a gain on the sale of mutual fund shares.

________ funds are mutual funds that attempt to mirror the movements of existing broad market indicators.

Mutual funds that receive dividends and capital gains must distribute these to investors in the same year.

A mutual fund that buys only the stocks of gold mining companies is a good example of a sector fund.

A mutual fund that does not charge investors a fee and sells direct to investors is a(n)________ mutual fund.

Even bond mutual funds with little or no default risk have an interest rate risk.

Index funds also offer tax advantages because they ________ in much trading and,therefore,________ capital gains.