Exam 4: Personal Investing - Investing in Mutual Funds

MERs can be high due to high sales and marketing expenses or due to research costs such as for researching international companies.

Which of the following must be considered before assessing the skills of equity fund managers?

Trailing commissions,management expenses and marketing expenses are all Chapter of the MER of a mutual fund.

While not all mutual funds have loads or commissions,they all have management fees and expenses that are charged to the mutual fund shareholders.

If Becky is going to retire soon,which of the following funds is most appropriate for her?

You are considering investing in a no-load mutual fund that focuses on growth stocks or in an index fund based on the TSX.The growth stocks fund had a five year average annual return of 11 percent with MER of 2.6 percent.The index fund had a five year average annual return of 11 percent with MER of 1.1 percent.Assuming equal risk,you should buy

The difference between an international fund and a global fund is that

If Betty has inherited significant wealth but has very limited investment knowledge,which of the following funds would be least appropriate for her?

A mutual fund has a beginning balance of $100 million,earns interest of $10 million,receives dividends of $15 million,and has expenses of $5 million.If 10 million shares are outstanding,what is the NAVPS?

Investors in mutual funds may receive capital gains without redeeming any shares.

What would be the return on a $1000 investment in a mutual fund whose NAV is $20? The fund has a 3 percent front-end load and,during the holding period,$400 of fund distributions are reinvested at a NAV of $25 (no load applied to reinvestment).The fund is ultimately sold at a NAV of $24.(Round to the nearest tenth of a percent.)

Mutual funds,which sell units directly to investors and repurchase units from investors who want to sell,are called

A fund with a favourable historical track record is likely to continue to outperform funds with similar objectives in the future.

Global bond funds

Which of the following statements is generally true when comparing mutual funds to exchange traded funds?

If Rebecca's mutual fund has a sales charge schedule saying that if the fund is sold within the first year,the sales charge is 6 percent and if it is sold in the third year,the sales charge becomes 4.5 percent,Rebecca's mutual fund has a

The return on an index fund may be less than the return on the index it represents because of

Three advantages of investing in mutual funds are diversification,marketability and economies of scale.

Advantages of investing in mutual funds include all of the following except

If you own seven mutual funds further diversification is not recommended.