Question 1

All investment companies charge an annual

Accepted Answer

A)  12b-1 fee. 
B)  marketing and distribution. 
C)  management fee. 
D)  maintenance fee. 
E)  market adjustment. 
A)  12b-1 fee. 
B)  marketing and distribution. 
C)  management fee. 
D)  maintenance fee. 
E)  market adjustment.

Question 2

It is quite common for investors to form a "portfolio" of managers with different capabilities.

Accepted Answer

A) True 
 B)False

Question 3

On January 2, 2017, you invest $10,000 in the Tiger Fund, a load fund that charges a fee of 6 percent. The fund's returns were 25 percent in 2017, 35 percent in 2018, and -5 percent in 2019. On December 31, 2019, you redeem all your shares of Tiger. The dollar value is

Accepted Answer

A)  $5,200.89. 
B)  $13,345.89. 
C)  $7,931.25. 
D)  $15,896.34. 
E)  $8,646.91. 
A)  $5,200.89. 
B)  $13,345.89. 
C)  $7,931.25. 
D)  $15,896.34. 
E)  $8,646.91.

Question 4

Hedge funds have no limitations on when and how often capital can be contributed or removed from the partnership.

Accepted Answer

A) True 
 B)False

Question 5

Consider X Bond Fund which consists of the five bonds shown below with no liabilities.   If initially the value of the fund was $1,000,000 and the original shares were offered to the public with a NAV of $25 per share, what is the current NAV of the fund?

Accepted Answer

A)  $25.00 
B)  $27.68 
C)  $25.68 
D)  $28.76 
E)  $26.78 
A)  $25.00 
B)  $27.68 
C)  $25.68 
D)  $28.76 
E)  $26.78

Question 6

The 12b-1 plan permits funds to deduct as much as ____ percent of average net asset per year to cover distribution costs, brokers' commissions, and general marketing expenses.

Accepted Answer

A)  0.25 
B)  0.50 
C)  0.75 
D)  1.00 
E)  1.50 
A)  0.25 
B)  0.50 
C)  0.75 
D)  1.00 
E)  1.50

Question 7

In a long short hedge fund strategy,

Accepted Answer

A)  managers take long positions in undervalued stocks and short positions in overvalued stocks. 
B)  managers take short positions in undervalued stocks and long positions in overvalued stocks. 
C)  managers take offsetting risk positions on the long and short side. 
D)  managers take long positions in undervalued stocks and long positions in overvalued stocks. 
E)  managers take short positions in undervalued stocks and short positions in overvalued stocks. 
A)  managers take long positions in undervalued stocks and short positions in overvalued stocks. 
B)  managers take short positions in undervalued stocks and long positions in overvalued stocks. 
C)  managers take offsetting risk positions on the long and short side. 
D)  managers take long positions in undervalued stocks and long positions in overvalued stocks. 
E)  managers take short positions in undervalued stocks and short positions in overvalued stocks.

Question 8

Diversifying a portfolio to eliminate unsystematic risk is one of the major benefits of investing in mutual funds.

Accepted Answer

A) True 
 B)False

Question 9

Income distributions and capital gains distributions are the only source of returns for mutual funds.

Accepted Answer

A) True 
 B)False

Question 10

Given the following fees and expected returns for fund Y and assuming an initial investment of $1000, calculate the value of the investment at the end of five years.

Accepted Answer

A)  $1069.82 
B)  $1550.77 
C)  $1642.36 
D)  $1362.59 
A)  $1069.82 
B)  $1550.77 
C)  $1642.36 
D)  $1362.59

Question 11

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Suppose ABC Mutual fund owned only four stocks as follows:
  
-Refer to Exhibit 24.1. The fund originated by selling $100,000 of stock at $10.00 per share. What is its current NAV?

Accepted Answer

A)  $1.47 
B)  $14.75 
C)  $16.03 
D)  $27.62 
E)  $234.12 
A)  $1.47 
B)  $14.75 
C)  $16.03 
D)  $27.62 
E)  $234.12

Question 12

A portfolio manager should be able to perform all of the following functions, EXCEPT

Accepted Answer

A)  determine risk-return preferences. 
B)  eliminate systematic risk. 
C)  maintain diversification ensuring a stabilized risk class. 
D)  attempt to derive a risk-adjusted performance that is superior to the market. 
E)  administer the account, keep records, and provide timely information. 
A)  determine risk-return preferences. 
B)  eliminate systematic risk. 
C)  maintain diversification ensuring a stabilized risk class. 
D)  attempt to derive a risk-adjusted performance that is superior to the market. 
E)  administer the account, keep records, and provide timely information.

Question 13

Suppose NBT Mutual Fund has no liabilities and owns only three stocks with the following number of shares and respective market prices.   The fund originated by selling $500,000 of stock at $100.00 per share. What is its current NAV?

Accepted Answer

A)  $0.72 
B)  $14.33 
C)  $15.21 
D)  $71.66 
E)  $70.25 
A)  $0.72 
B)  $14.33 
C)  $15.21 
D)  $71.66 
E)  $70.25

Question 14

Suppose you consider investing $15,000 in a load fund from which a fee of 5 percent is deducted and you expect the fund to earn 12 percent over the next year. Alternatively, you could invest in a no-load fund that is expected to earn 10 percent and which takes a 1/2 percent redemption fee. Which is better and by how much?

Accepted Answer

A)  load fund by $318.45 
B)  no load fund by $457.50 
C)  funds are equal 
D)  load fund by $415.10 
E)  no load fund by $211.51 
A)  load fund by $318.45 
B)  no load fund by $457.50 
C)  funds are equal 
D)  load fund by $415.10 
E)  no load fund by $211.51

Question 15

Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referred to as

Accepted Answer

A)  closed-end. 
B)  open-end. 
C)  no-load. 
D)  load. 
E)  public. 
A)  closed-end. 
B)  open-end. 
C)  no-load. 
D)  load. 
E)  public.

Question 16

An open-end investment company differs from a closed-end investment company by the way they operate after the initial public offering.

Accepted Answer

A) True 
 B)False

Question 17

On January 2, 2017, you invest $50,000 in the Lizbiz Mutual Fund, a load fund that charges a fee of 5 percent. The fund's returns were 14.6 percent in 2017, -6.4 percent in 2018, and 15.2 percent in 2019. On December 31, 2019, you redeem all your shares. The dollar value is

Accepted Answer

A)  $66,722.27. 
B)  $15,200.00. 
C)  $58,695.74. 
D)  $33,366.25. 
E)  $10,000.00. 
A)  $66,722.27. 
B)  $15,200.00. 
C)  $58,695.74. 
D)  $33,366.25. 
E)  $10,000.00.

Question 18

On January 2, 2017, you invest $100,000 in Righteous, 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 Righteous shares. The dollar value is

Accepted Answer

A)  $12,800.00. 
B)  $12,892.50. 
C)  $100,000.00. 
D)  $128,925.00. 
E)  $10,000.00. 
A)  $12,800.00. 
B)  $12,892.50. 
C)  $100,000.00. 
D)  $128,925.00. 
E)  $10,000.00.

Question 19

The market price of shares of a closed-end fund is typically determined by supply and demand.

Accepted Answer

A) True 
 B)False

Question 20

You are considering investing $50,000 in two mutual funds. The first fund is a load fund with a fee of 6 percent, and you expect the fund to earn 11 percent over the next year. Alternatively, you could invest in a no-load fund that is expected to earn 8 percent and has a 0.5 percent redemption fee. What fund has a higher return and how much more value will it have after the first year?

Accepted Answer

A)  load fund by $1,360 
B)  load fund by $580 
C)  no load fund by $580 
D)  no load fund by $1,560 
E)  no load fund by $1,820 
A)  load fund by $1,360 
B)  load fund by $580 
C)  no load fund by $580 
D)  no load fund by $1,560 
E)  no load fund by $1,820

All investment companies charge an annual

It is quite common for investors to form a "portfolio" of managers with different capabilities.

On January 2, 2017, you invest $10,000 in the Tiger Fund, a load fund that charges a fee of 6 percent. The fund's returns were 25 percent in 2017, 35 percent in 2018, and -5 percent in 2019. On December 31, 2019, you redeem all your shares of Tiger. The dollar value is

Hedge funds have no limitations on when and how often capital can be contributed or removed from the partnership.

Consider X Bond Fund which consists of the five bonds shown below with no liabilities. If initially the value of the fund was $1,000,000 and the original shares were offered to the public with a NAV of $25 per share, what is the current NAV of the fund?

The 12b-1 plan permits funds to deduct as much as ____ percent of average net asset per year to cover distribution costs, brokers' commissions, and general marketing expenses.

In a long short hedge fund strategy,

Diversifying a portfolio to eliminate unsystematic risk is one of the major benefits of investing in mutual funds.

Income distributions and capital gains distributions are the only source of returns for mutual funds.

Given the following fees and expected returns for fund Y and assuming an initial investment of $1000, calculate the value of the investment at the end of five years.

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Suppose ABC Mutual fund owned only four stocks as follows: -Refer to Exhibit 24.1. The fund originated by selling $100,000 of stock at $10.00 per share. What is its current NAV?

A portfolio manager should be able to perform all of the following functions, EXCEPT

Suppose NBT Mutual Fund has no liabilities and owns only three stocks with the following number of shares and respective market prices. The fund originated by selling $500,000 of stock at $100.00 per share. What is its current NAV?

Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referred to as

An open-end investment company differs from a closed-end investment company by the way they operate after the initial public offering.

On January 2, 2017, you invest $50,000 in the Lizbiz Mutual Fund, a load fund that charges a fee of 5 percent. The fund's returns were 14.6 percent in 2017, -6.4 percent in 2018, and 15.2 percent in 2019. On December 31, 2019, you redeem all your shares. The dollar value is

On January 2, 2017, you invest $100,000 in Righteous, 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 Righteous shares. The dollar value is

The market price of shares of a closed-end fund is typically determined by supply and demand.

The Investment Setting

The Investment Setting: Part A

Asset Allocation and Security Selection

Asset Allocation and Security Selection: Part A

Organization and Functioning of Securities Markets

Security Market Indexes and Index Funds

Efficient Capital Markets, Behavioral Finance, and Technical Analysis

An Introduction to Portfolio Management

An Introduction to Portfolio Management: Part A

An Introduction to Portfolio Management: Part B

Asset Pricing Models

Equity Valuation

The Top-Down Approach to Market, Industry, and Company Analysis

The Practice of Fundamental Investing

Equity Portfolio Management Strategies

Bond Fundamentals and Valuation

Bond Analysis and Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward, Futures, and Swap Contracts

Option Contracts

Evaluation of Portfolio Performance

Filters

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

All investment companies charge an annual

It is quite common for investors to form a "portfolio" of managers with different capabilities.

On January 2, 2017, you invest $10,000 in the Tiger Fund, a load fund that charges a fee of 6 percent. The fund's returns were 25 percent in 2017, 35 percent in 2018, and -5 percent in 2019. On December 31, 2019, you redeem all your shares of Tiger. The dollar value is

Hedge funds have no limitations on when and how often capital can be contributed or removed from the partnership.

Consider X Bond Fund which consists of the five bonds shown below with no liabilities. If initially the value of the fund was $1,000,000 and the original shares were offered to the public with a NAV of $25 per share, what is the current NAV of the fund?

The 12b-1 plan permits funds to deduct as much as ____ percent of average net asset per year to cover distribution costs, brokers' commissions, and general marketing expenses.

In a long short hedge fund strategy,

Diversifying a portfolio to eliminate unsystematic risk is one of the major benefits of investing in mutual funds.

Income distributions and capital gains distributions are the only source of returns for mutual funds.

Given the following fees and expected returns for fund Y and assuming an initial investment of $1000, calculate the value of the investment at the end of five years.

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Suppose ABC Mutual fund owned only four stocks as follows: -Refer to Exhibit 24.1. The fund originated by selling $100,000 of stock at $10.00 per share. What is its current NAV?

A portfolio manager should be able to perform all of the following functions, EXCEPT

Suppose NBT Mutual Fund has no liabilities and owns only three stocks with the following number of shares and respective market prices. The fund originated by selling $500,000 of stock at $100.00 per share. What is its current NAV?

Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referred to as

An open-end investment company differs from a closed-end investment company by the way they operate after the initial public offering.

On January 2, 2017, you invest $50,000 in the Lizbiz Mutual Fund, a load fund that charges a fee of 5 percent. The fund's returns were 14.6 percent in 2017, -6.4 percent in 2018, and 15.2 percent in 2019. On December 31, 2019, you redeem all your shares. The dollar value is

On January 2, 2017, you invest $100,000 in Righteous, 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 Righteous shares. The dollar value is

The market price of shares of a closed-end fund is typically determined by supply and demand.

The Investment Setting

The Investment Setting: Part A

Asset Allocation and Security Selection

Asset Allocation and Security Selection: Part A

Organization and Functioning of Securities Markets

Security Market Indexes and Index Funds

Efficient Capital Markets, Behavioral Finance, and Technical Analysis

An Introduction to Portfolio Management

An Introduction to Portfolio Management: Part A

An Introduction to Portfolio Management: Part B

Asset Pricing Models

Equity Valuation

The Top-Down Approach to Market, Industry, and Company Analysis

The Practice of Fundamental Investing

Equity Portfolio Management Strategies

Bond Fundamentals and Valuation

Bond Analysis and Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward, Futures, and Swap Contracts

Option Contracts

Evaluation of Portfolio Performance

Filters