Question 1

Having money taken automatically from your paycheck and put into a mutual fund is an example of:

Accepted Answer

A)  an automatic investment plan. 
B)  an automatic reinvestment plan. 
C)  a systematic withdrawal plan. 
D)  a conversion privilege. 
E)  none of these 
A)  an automatic investment plan. 
B)  an automatic reinvestment plan. 
C)  a systematic withdrawal plan. 
D)  a conversion privilege. 
E)  none of these

Question 2

A(n)_____ actually runs the portfolio and makes the buy and sell decisions.

Accepted Answer

A)  transfer agent 
B)  distributor 
C)  money manager 
D)  investment advisor 
E)  c and d 
A)  transfer agent 
B)  distributor 
C)  money manager 
D)  investment advisor 
E)  c and d

Question 3

Exchange traded funds can create new shares to meet demand.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is a characteristic of exchange-traded mutual funds?

Accepted Answer

A)  Traded on listed exchanges 
B)  Closed-end funds 
C)  Generally organized as sector funds 
D)  Actively managed funds 
E)  All of the above 
A)  Traded on listed exchanges 
B)  Closed-end funds 
C)  Generally organized as sector funds 
D)  Actively managed funds 
E)  All of the above

Question 5

If a mutual fund provides for automatic reinvestment,the reinvested dividends will not be taxed until the shares are redeemed.

Accepted Answer

A) True 
 B)False

Question 6

Back-end loaded mutual funds are most appropriate for:

Accepted Answer

A)  an investor with a short time horizon. 
B)  an investor with a long time horizon. 
C)  an investor who wants to purchase a no-load product. 
D)  all investors. 
E)  none of the above 
A)  an investor with a short time horizon. 
B)  an investor with a long time horizon. 
C)  an investor who wants to purchase a no-load product. 
D)  all investors. 
E)  none of the above

Question 7

An investor with a small amount of money should stick to using loaded-funds instead of no-load funds.

Accepted Answer

A) True 
 B)False

Question 8

A mutual fund always provides active professional investment management.

Accepted Answer

A) True 
 B)False

Question 9

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.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 10

A fund's objective must be stated in its prospectus.

Accepted Answer

A) True 
 B)False

Question 11

Investors select and purchase securities held within mutual funds.

Accepted Answer

A) True 
 B)False

Question 12

Advantages of exchange traded funds over mutual funds include all of the following except:

Accepted Answer

A)  lower overhead expenses. 
B)  lower capital gains tax. 
C)  lower expense ratio.
) 
D)  better diversification. 
E)  longer time horizon. 
A)  lower overhead expenses. 
B)  lower capital gains tax. 
C)  lower expense ratio.
) 
D)  better diversification. 
E)  longer time horizon.

Question 13

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.
-The primary reason for investing in mutual funds is [professional management | diversification].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 14

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.
-The cost of buying shares in a load fund is [higher | lower] compared to the commissions charged for buying stock.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 15

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.
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?

Accepted Answer

a. Investment / Offer price: $1,000 / $1

Question 16

Back-end load funds offer more liquidity to investors than no-load funds.

Accepted Answer

A) True 
 B)False

Question 17

Socially responsible funds have experienced lower return than other types of funds of similar risk.

Accepted Answer

A) True 
 B)False

Question 18

The major reason that investors use mutual funds is their contractual plans which force regular investing.

Accepted Answer

A) True 
 B)False

Question 19

A(n)_____ fund is quite speculative.

Accepted Answer

A)  balanced 
B)  growth 
C)  equity income 
D)  aggressive growth 
E)  money market 
A)  balanced 
B)  growth 
C)  equity income 
D)  aggressive growth 
E)  money market

Question 20

All no-load funds charge an upfront fee to purchase shares of a mutual fund.

Accepted Answer

A) True 
 B)False

Having money taken automatically from your paycheck and put into a mutual fund is an example of:

A(n)_____ actually runs the portfolio and makes the buy and sell decisions.

Exchange traded funds can create new shares to meet demand.

Which of the following is a characteristic of exchange-traded mutual funds?

If a mutual fund provides for automatic reinvestment,the reinvested dividends will not be taxed until the shares are redeemed.

Back-end loaded mutual funds are most appropriate for:

An investor with a small amount of money should stick to using loaded-funds instead of no-load funds.

A mutual fund always provides active professional investment management.

A fund's objective must be stated in its prospectus.

Investors select and purchase securities held within mutual funds.

Advantages of exchange traded funds over mutual funds include all of the following except:

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. -The primary reason for investing in mutual funds is [professional management | diversification].

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. 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?

Back-end load funds offer more liquidity to investors than no-load funds.

Socially responsible funds have experienced lower return than other types of funds of similar risk.

The major reason that investors use mutual funds is their contractual plans which force regular investing.

A(n)_____ fund is quite speculative.

All no-load funds charge an upfront fee to purchase shares of a mutual fund.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters

Exam 13: Investing in Mutual Funds

Having money taken automatically from your paycheck and put into a mutual fund is an example of:

A(n)_____ actually runs the portfolio and makes the buy and sell decisions.

Exchange traded funds can create new shares to meet demand.

Which of the following is a characteristic of exchange-traded mutual funds?

If a mutual fund provides for automatic reinvestment,the reinvested dividends will not be taxed until the shares are redeemed.

Back-end loaded mutual funds are most appropriate for:

An investor with a small amount of money should stick to using loaded-funds instead of no-load funds.

A mutual fund always provides active professional investment management.

A fund's objective must be stated in its prospectus.

Investors select and purchase securities held within mutual funds.

Advantages of exchange traded funds over mutual funds include all of the following except:

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. -The primary reason for investing in mutual funds is [professional management | diversification].

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. 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?

Back-end load funds offer more liquidity to investors than no-load funds.

Socially responsible funds have experienced lower return than other types of funds of similar risk.

The major reason that investors use mutual funds is their contractual plans which force regular investing.

A(n)_____ fund is quite speculative.

All no-load funds charge an upfront fee to purchase shares of a mutual fund.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Planning for Retirement

Preserving Your Estate

Filters