Exam 14: Mutual Funds: an Easy Way to Diversify

At the beginning of 2017,bond funds-including both municipal and taxable bond funds-made up the largest segment of the $262 billion closed-end fund market.

All distributions from a mutual fund,whether paid out or reinvested,are taxable in the year in which they occur.

A closed-end fund trades more like common stock than a mutual fund.

You purchased 1,000 shares of fund ABC for $35.00 NAV per share.You elected the dividend reinvestment plan and had all dividend and capital gains distributions reinvested in additional shares.You just closed your account and sold 1,100 shares for $30 NAV.What was your total return on this investment?

There are dissimilarities between U.S.government,GNMA,municipal,and corporate bond funds.Please point them out.

You purchased 100 shares of Gibraltar Strength Fund for $20.50 per share.As a result of distribution reinvestment you currently own 120 shares with a NAV of $22.75 per share.What is your total return?

A mutual fund ________ provides a description of the mutual fund including the fund's objectives and risk,its historical performance,its expenses,manager's history and other information.

Which of the following is a benefit to investing in a mutual fund?

What steps would you advise someone to go through when buying a mutual fund?

Once you open a mutual fund account,you can use EFT to have money directly withdrawn from your bank account to pay yourself first.

Life cycle funds

An open-end mutual fund has a fixed number of shares which are sold by the mutual fund at its inception.

By law,all mutual funds must be broadly diversified.

The potential lower returns on mutual funds versus the potential returns on individual stocks is due to poor performance by the fund managers.

What information can an investor find in the prospectus of a mutual fund?

By law,a bond fund may not invest in international securities.

How is an asset allocation fund different from a balanced mutual fund?

Which of the following is a disadvantage to mutual fund investing?

Mutual fund fees and expenses will negatively affect the return you receive on your investment.

You may be charged a small transaction fee when you buy no load funds through a "mutual fund supermarket."