Question 1

Balanced growth and income funds contain both growth stocks and stocks that pay high dividends.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  engage; generate 
B)  do not engage; generate 
C)  engage; do not generate 
D)  do not engage; do not generate 
A)  engage; generate 
B)  do not engage; generate 
C)  engage; do not generate 
D)  do not engage; do not generate

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The price per share for a closed-end mutual fund can differ from the fund's NAV per share.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 7

Investors in high tax brackets will normally achieve higher performance by selecting mutual funds that generate

Accepted Answer

A)  long-term dividends. 
B)  long-term capital gains. 
C)  long-term stock dividends. 
D)  short-term capital gains. 
A)  long-term dividends. 
B)  long-term capital gains. 
C)  long-term stock dividends. 
D)  short-term capital gains.

Question 8

On average,mutual funds have an expense ratio of about 3%.

Accepted Answer

A) True 
 B)False

Question 9

Socially responsible mutual funds are those whose managers have taken and passed a strict financial ethics test.

Accepted Answer

A) True 
 B)False

Question 10

On January 1,you invest $10,000 in an open-end mutual fund selling for $25 per share that has a 2% load,1.5% management fee and 1% 12b-1 expense s.If the fund NAV appreciates to $28 by the time you sell it on December 31,what was your return on investment?

Accepted Answer

A)  9.76% 
B)  11.2% 
C)  8.7% 
D)  14% 
A)  9.76% 
B)  11.2% 
C)  8.7% 
D)  14%

Question 11

Which of the following 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 12

A ________ mutual fund is a good investment for "rainy day" funds,while a ________ mutual fund is a good type of investment for funds earmarked for retirement in 25 years.

Accepted Answer

A)  municipal bond; corporate income 
B)  money market; global growth 
C)  diverse equity; money market 
D)  short term junk bond; long term junk bond 
A)  municipal bond; corporate income 
B)  money market; global growth 
C)  diverse equity; money market 
D)  short term junk bond; long term junk bond

Question 13

From the perspective of investors,the most important expense statistic mentioned in the prospectus of a mutual fund is the

Accepted Answer

A)  gross profit margin ratio. 
B)  expense ratio. 
C)  times interest earned ratio. 
D)  growth rate. 
A)  gross profit margin ratio. 
B)  expense ratio. 
C)  times interest earned ratio. 
D)  growth rate.

Question 14

Which of the following bond mutual funds has both the highest default risk and the highest interest rate risk?

Accepted Answer

A)  Long-term Treasury 
B)  Short-term Ginnie Mae 
C)  Short-term corporate 
D)  Long-term high-yield 
A)  Long-term Treasury 
B)  Short-term Ginnie Mae 
C)  Short-term corporate 
D)  Long-term high-yield

Balanced growth and income funds contain both growth stocks and stocks that pay high dividends.

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

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

The price per share for a closed-end mutual fund can differ from the fund's NAV per share.

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

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

Investors in high tax brackets will normally achieve higher performance by selecting mutual funds that generate

On average,mutual funds have an expense ratio of about 3%.

Socially responsible mutual funds are those whose managers have taken and passed a strict financial ethics test.

On January 1,you invest $10,000 in an open-end mutual fund selling for $25 per share that has a 2% load,1.5% management fee and 1% 12b-1 expense s.If the fund NAV appreciates to $28 by the time you sell it on December 31,what was your return on investment?

Which of the following is not a reason for investing in mutual funds?

A mutual fund is a good investment for "rainy day" funds,while a mutual fund is a good type of investment for funds earmarked for retirement in 25 years.

From the perspective of investors,the most important expense statistic mentioned in the prospectus of a mutual fund is the

Which of the following bond mutual funds has both the highest default risk and the highest interest rate risk?

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

Filters

Exam 17: Investing in Mutual Funds

Balanced growth and income funds contain both growth stocks and stocks that pay high dividends.

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

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

The price per share for a closed-end mutual fund can differ from the fund's NAV per share.

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

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

Investors in high tax brackets will normally achieve higher performance by selecting mutual funds that generate

On average,mutual funds have an expense ratio of about 3%.

Socially responsible mutual funds are those whose managers have taken and passed a strict financial ethics test.

On January 1,you invest $10,000 in an open-end mutual fund selling for $25 per share that has a 2% load,1.5% management fee and 1% 12b-1 expense s.If the fund NAV appreciates to $28 by the time you sell it on December 31,what was your return on investment?

Which of the following is not a reason for investing in mutual funds?

A ________ mutual fund is a good investment for "rainy day" funds,while a ________ mutual fund is a good type of investment for funds earmarked for retirement in 25 years.

From the perspective of investors,the most important expense statistic mentioned in the prospectus of a mutual fund is the

Which of the following bond mutual funds has both the highest default risk and the highest interest rate risk?

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

Filters

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

A mutual fund is a good investment for "rainy day" funds,while a mutual fund is a good type of investment for funds earmarked for retirement in 25 years.