Exam 13: Investing in Mutual Funds

Equity-income funds emphasize capital appreciation in their investment goals.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Calculating the value of income-producing property requires estimating the [?NAV | ?NOI].

Conversion privileges allow investors to exchange one fund's shares for that of another,as long as the funds are in the same fund family.

____ would not be a reason for purchasing mutual funds.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A fund that invests only in utility stocks could be classified as [an industry | a sector] fund.

Dividend income,capital gains distributions,and changes in the fund's share price are all sources of return for a mutual fund.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Open-end | Closed-end] mutual funds always redeem shares at NAV.

While ETFs offer many of the benefits of mutual funds,they have the tax-timing disadvantages not present with otherwise comparable mutual funds.

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

A mutual fund prospectus is required to fully disclose all fund fees and expenses.

What type of REIT is most attractive to income-oriented investors?

RACE Mutual fund is a no-load fund that had a net asset value one year ago of $25.60.Today the NAV is $28.83.During the year dividends of $0.72 were paid out and a capital gains distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

A(n)____ fund is quite speculative.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Value funds look for stocks with relatively [high | low] dividend yields.

Investors tend to use mutual funds for which of the following reasons

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -If you choose to have your mutual fund dividends automatically reinvested,you [may defer taxes on the dividends until you redeem some shares | still owe taxes for the year the dividends were earned].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A fund that invests both in foreign and U.S.securities would be known as [an international | a global] fund.

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.

The fund whose main objective is growth is known as a(n)____ fund.

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.(Show all work.) 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?