Question 1

A mutual fund that invests only in healthcare-related companies is an example of a(n)________ fund.

Accepted Answer

The answer of A mutual fund that invests only in...

Question 2

Arrange the following five bond funds starting with the lowest return and risk to the highest: long-term global,short-term T-bond,intermediate-term corporate,long-term high-yield,long-term Ginnie Mae.

Accepted Answer

short-term T-bond,intermediate

Question 3

A(n)________ is a document that provides financial information about a mutual fund,including expenses and past performance.

Accepted Answer

A) annual report 
B) prospectus 
C) financial statement 
D) balance sheet 
A) annual report 
B) prospectus 
C) financial statement 
D) balance sheet

Question 4

In assessing different mutual funds,the returns vary,but the expenses are fixed.

Accepted Answer

A) True 
 B)False

Question 5

Hedge funds,which are not regulated by the Securities and Exchange Commission,are only available to wealthy investors and are less risky than ordinary mutual funds.

Accepted Answer

A) True 
 B)False

Question 6

There is no limit on the number of open-end mutual fund shares that a company can offer.

Accepted Answer

A) True 
 B)False

Question 7

Open-end mutual fund companies sell directly to investors and repurchase shares whenever investors wish to sell them.

Accepted Answer

A) True 
 B)False

Question 8

A stock mutual fund's prospectus typically states that the fund is subject to all of the following risks except

Accepted Answer

A) market risk. 
B) general decline in the stock market. 
C) substantial declines in individual stocks. 
D) default risk. 
A) market risk. 
B) general decline in the stock market. 
C) substantial declines in individual stocks. 
D) default risk.

Question 9

Closed-end mutual funds have a limited number of shares that are sold when the funds are first created and are resold over the stock exchanges.

Accepted Answer

A) True 
 B)False

Question 10

Which is not a reason for investing in mutual funds?

Accepted Answer

A) Small amount of funds needed 
B) Portfolio manager expertise 
C) Specific investment goals 
D) Overly diversified 
A) Small amount of funds needed 
B) Portfolio manager expertise 
C) Specific investment goals 
D) Overly diversified

Question 11

A mutual fund is a diversified portfolio of stocks and/or bonds depending on what the manager has purchased.

Accepted Answer

A) True 
 B)False

Question 12

You may purchase an open-end no-load mutual fund in all of the following ways except

Accepted Answer

A) over the phone. 
B) by U.S.mail. 
C) over the Internet. 
D) from a broker. 
A) over the phone. 
B) by U.S.mail. 
C) over the Internet. 
D) from a broker.

Question 13

In calculating the net asset value,which of the following is true?

Accepted Answer

A) Dividends are subtracted and expenses added 
B) Interest is subtracted and expenses are added 
C) Dividends are added and expenses are subtracted 
D) Interest and other expenses are not included 
A) Dividends are subtracted and expenses added 
B) Interest is subtracted and expenses are added 
C) Dividends are added and expenses are subtracted 
D) Interest and other expenses are not included

Question 14

Of the management,advertising,and administrative fees charged by mutual funds,normally the management fee is the smallest.

Accepted Answer

A) True 
 B)False

Question 15

You are investing for your retirement 20 years hence.You would be most interested in a fund whose investment objective is focused on

Accepted Answer

A) long-term growth. 
B) capital conservation. 
C) income generation. 
D) a balance of some growth but mostly high dividends. 
A) long-term growth. 
B) capital conservation. 
C) income generation. 
D) a balance of some growth but mostly high dividends.

Question 16

Which of the following stock funds would probably have the lowest risk and return?

Accepted Answer

A) Index 
B) Capital appreciation 
C) Income 
D) Sector funds 
A) Index 
B) Capital appreciation 
C) Income 
D) Sector funds

Question 17

Studies on mutual funds have found that load funds perform better than no-load funds.

Accepted Answer

A) True 
 B)False

Question 18

Global funds are not usually subject to the following risk?

Accepted Answer

A) Interest rate 
B) Exchange 
C) Political 
D) Liquidity 
A) Interest rate 
B) Exchange 
C) Political 
D) Liquidity

Question 19

International bond funds are

Accepted Answer

A) issued by non-U.S.firms or governments. 
B) offer a higher yield than U.S.bonds. 
C) subject to exchange risk. 
D) All of the above. 
A) issued by non-U.S.firms or governments. 
B) offer a higher yield than U.S.bonds. 
C) subject to exchange risk. 
D) All of the above.

Question 20

Index mutual funds tend to have lower expenses than other types of mutual funds.

Accepted Answer

A) True 
 B)False

Exam 17: Investing in Mutual Funds

A mutual fund that invests only in healthcare-related companies is an example of a(n)________ fund.

Arrange the following five bond funds starting with the lowest return and risk to the highest: long-term global,short-term T-bond,intermediate-term corporate,long-term high-yield,long-term Ginnie Mae.

A(n)________ is a document that provides financial information about a mutual fund,including expenses and past performance.

In assessing different mutual funds,the returns vary,but the expenses are fixed.

Hedge funds,which are not regulated by the Securities and Exchange Commission,are only available to wealthy investors and are less risky than ordinary mutual funds.

There is no limit on the number of open-end mutual fund shares that a company can offer.

Open-end mutual fund companies sell directly to investors and repurchase shares whenever investors wish to sell them.

A stock mutual fund's prospectus typically states that the fund is subject to all of the following risks except

Closed-end mutual funds have a limited number of shares that are sold when the funds are first created and are resold over the stock exchanges.

Which is not a reason for investing in mutual funds?

A mutual fund is a diversified portfolio of stocks and/or bonds depending on what the manager has purchased.

You may purchase an open-end no-load mutual fund in all of the following ways except

In calculating the net asset value,which of the following is true?

Of the management,advertising,and administrative fees charged by mutual funds,normally the management fee is the smallest.

You are investing for your retirement 20 years hence.You would be most interested in a fund whose investment objective is focused on

Which of the following stock funds would probably have the lowest risk and return?

Studies on mutual funds have found that load funds perform better than no-load funds.

Global funds are not usually subject to the following risk?

International bond funds are

Index mutual funds tend to have lower expenses than other types of mutual funds.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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