Exam 17: Professional Money Management, Alternative Assets, and Industry Ethics

Suppose Mega Mutual Fund owns only the four stocks shown below with no liabilities. The fund originated by selling $300,000 of stock at $30.00 per share. What is its current NAV?

A 12b-1 plan allows funds to

Consider the Defiance Bond Fund that consists of the three bonds shown below and has no liabilities. If initially the value of the fund was $250,000 and the original shares were offered to the public with a NAV of $25 per share, what is the current NAV of the fund?

Which of the following statements regarding the closed-end investment company's net asset value (NAV) is FALSE?

Investing in emerging markets can be viewed as a global application of

Mutual fund performance studies have shown that most funds

Open-end investment companies continue to sell and repurchase shares after their initial public offering.

What is the offering price for a mutual fund with a NAV of $22.50 and a load of 5 percent?

An investment company is

On January 2, 2017, you invest $50,000 in A Mutual Fund, a load fund that charges a fee of 7 percent. The fund's returns were 12.8 percent in 2017, 13.9 percent in 2018, and 7.9 percent in 2019. On December 31, 2019, you redeem all your shares in A. The dollar value is

Open-end and closed-end investment companies are similar in that both companies will repurchase shares on demand.

The Investment Company Act of 1940

The offering price of a load fund equals the NAV of the fund

Open-end mutual funds that charge a sales fee when the fund is initially offered to the investor are known as

A no-load fund imposes a substantial sales charge and sells shares at their NAV.

The total market value of all assets of a mutual fund divided by the number of shares of the fund is known as the net asset value.

A function your portfolio manager may perform for you is to maintain the diversification of your portfolio within your desired risk class.

An investor should be cautious when selecting a fund based solely on the manager's past performance because past performance may not be repeated in the future.

Hedge funds are far less liquid than mutual fund shares.

A major question in modern finance regarding closed-end investment companies is