Exam 13: Investing in 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. -[?Appreciation | ?Depreciation] gives the property owner an allowance for the decline in the physical condition of real estate over time.

Value funds typically invest in stocks that do not pay dividends and have a high price/earnings ratio.

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

Exchange-traded funds can create new shares to meet demand.

Index funds are actively managed.

A(n)____ fund invests primarily in a portfolio of common stocks for the income they provide.

A hybrid REIT would invest only in real estate mortgages.

With open-end mutual funds,investors cannot lose more than they invested.

The price an investor can sell his shares of an open-end mutual fund is the net asset value.

Closed-end investment companies are characterized by

The ____ is a service offered by mutual funds that helps investors earn compound interest on their investments.

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. -[Both load and no-load | Only no-load] funds can charge a redemption fee.

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 mutual fund [?does | ?does not] have to fully disclose its fees in the fund's prospectus.

A balanced fund that emphasizes growth in capital is called a(n)

Exchange-traded mutual funds are actually closed-end 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. -An [?automatic investment plan | ??automatic reinvestment plan] gives share owners the option of electing to have dividends and capital gains distributions reinvested.

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 quotation for a mutual fund shows a NAV of $9.60 and an offer price of $10.00.With an investment of $1,000,you could buy [104.17 | 100] shares.

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. -Index funds,while trying to match market performance,consistently [perform well | perform poorly] against market benchmarks.

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. -Usually the management firm of a mutual fund also serves as the [custodian | investment advisor] of the fund.

More people invest in mutual funds than in any other type of investment product.