Question 1

A stock mutual fund that pays higher-than-normal dividends is called a growth fund.

Accepted Answer

A) True 
 B)False

Question 2

A conservative investor should only invest in a variety of bond mutual funds.

Accepted Answer

A) True 
 B)False

Question 3

The possibility that the Bank of Canada may raise the prime rate is an example of

Accepted Answer

A) political risk. 
B) exchange rate risk. 
C) interest rate risk. 
D) monetary risk. 
A) political risk. 
B) exchange rate risk. 
C) interest rate risk. 
D) monetary risk.

Question 4

Closed-end mutual fund shares trade on stock exchanges and can sell at a premium or discount to their NAVPS.

Accepted Answer

A) True 
 B)False

Question 5

Segregated funds are insurance products,but are similar to mutual funds as they offer a guarantee of as much as 100 percent of the funds invested upon maturity or the death of the owner.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following bond mutual funds have both the highest default risk and interest rate risk?

Accepted Answer

A) Long-term AAA corporate bonds 
B) Short-term BBB corporate bonds 
C) Short-term high-yield corporate bonds 
D) High-yield long-term corporate bonds 
A) Long-term AAA corporate bonds 
B) Short-term BBB corporate bonds 
C) Short-term high-yield corporate bonds 
D) High-yield long-term corporate bonds

Question 7

The most important considerations in choosing a mutual fund is your investment objectives and comparing fees and expenses charged.

Accepted Answer

A) True 
 B)False

Question 8

A mutual fund with investments in bonds,stock,and preferred shares would best be described as

Accepted Answer

A) a balanced fund. 
B) a three sector fund. 
C) a diversified fund. 
D) a balanced growth and income fund. 
A) a balanced fund. 
B) a three sector fund. 
C) a diversified fund. 
D) a balanced growth and income fund.

Question 9

You own 600 units of a fund with a current NAV of $14.36.Your portion of the fund distributions is $718.00 of dividends,capital gains,and interest earnings.What will be your total units now?

Accepted Answer

A) 600 units 
B) 605 units 
C) 550 units 
D) 650 units 
A) 600 units 
B) 605 units 
C) 550 units 
D) 650 units

Question 10

A mutual fund that buys only the stocks of the TSX is a good example of a sector fund.

Accepted Answer

A) True 
 B)False

Question 11

What is the biggest advantage of an ETF over other funds?

Accepted Answer

A) Better management 
B) Lower MERs 
C) Economies of scale 
D) Diversification 
A) Better management 
B) Lower MERs 
C) Economies of scale 
D) Diversification

Question 12

For whom would purchasing segregated funds would be most appropriate?

Accepted Answer

A) A young married couple looking for a high risk long-term growth portfolio 
B) A business owner who deals with creditors on a regular basis 
C) An investor seeking low management fees and low MERs 
D) An investor seeking special diversification in sector funds 
A) A young married couple looking for a high risk long-term growth portfolio 
B) A business owner who deals with creditors on a regular basis 
C) An investor seeking low management fees and low MERs 
D) An investor seeking special diversification in sector funds

Question 13

Which of the following can be a source of taxation even if not paid out to owners of a Canadian bond mutual fund?

Accepted Answer

A) Interest,dividends and capital gains 
B) Interest and capital gains 
C) Interest and dividends 
D) Interest income only 
A) Interest,dividends and capital gains 
B) Interest and capital gains 
C) Interest and dividends 
D) Interest income only

Question 14

In non-registered accounts,investors in high marginal tax brackets will normally prefer mutual funds that generate

Accepted Answer

A) dividends. 
B) long-term capital gains. 
C) long-term stock dividends. 
D) short-term capital gains. 
A) dividends. 
B) long-term capital gains. 
C) long-term stock dividends. 
D) short-term capital gains.

Question 15

Studies show that segregated funds

Accepted Answer

A) consistently outperform stock markets because of their guarantee. 
B) consistently outperform mutual funds because of the probate fees. 
C) consistently underperform mutual funds because of their higher expenses. 
D) consistently outperform mutual funds because of the important insurance option. 
A) consistently outperform stock markets because of their guarantee. 
B) consistently outperform mutual funds because of the probate fees. 
C) consistently underperform mutual funds because of their higher expenses. 
D) consistently outperform mutual funds because of the important insurance option.

Question 16

Because exchange-traded funds (ETFs)are passively managed,they are a good choice for an investor who is looking for tax efficiency.

Accepted Answer

A) True 
 B)False

Question 17

Both segregated funds and mutual funds generally offer creditor protection in the event of bankruptcy.

Accepted Answer

A) True 
 B)False

Question 18

Compare three factors (such as level of diversification,MERs,management and/or performance)between segregated funds,ETFs and mutual funds.Provide your own opinion as to the advantages or disadvantages.

Accepted Answer

Students could select different variable

Question 19

A mutual fund that invests only in shares of gold mining companies would be called a

Accepted Answer

A) growth fund. 
B) small-cap fund. 
C) Canadian equity fund. 
D) sector fund. 
A) growth fund. 
B) small-cap fund. 
C) Canadian equity fund. 
D) sector fund.

Question 20

You own 500 units of a fund that now has a NAV of $12.30.What is your total investment worth?

Accepted Answer

A) $6150 
B) $61 500 
C) $6150,minus the load fee 
D) $6150,plus the load fee 
A) $6150 
B) $61 500 
C) $6150,minus the load fee 
D) $6150,plus the load fee

A stock mutual fund that pays higher-than-normal dividends is called a growth fund.

A conservative investor should only invest in a variety of bond mutual funds.

The possibility that the Bank of Canada may raise the prime rate is an example of

Closed-end mutual fund shares trade on stock exchanges and can sell at a premium or discount to their NAVPS.

Segregated funds are insurance products,but are similar to mutual funds as they offer a guarantee of as much as 100 percent of the funds invested upon maturity or the death of the owner.

Which of the following bond mutual funds have both the highest default risk and interest rate risk?

The most important considerations in choosing a mutual fund is your investment objectives and comparing fees and expenses charged.

A mutual fund with investments in bonds,stock,and preferred shares would best be described as

You own 600 units of a fund with a current NAV of $14.36.Your portion of the fund distributions is $718.00 of dividends,capital gains,and interest earnings.What will be your total units now?

A mutual fund that buys only the stocks of the TSX is a good example of a sector fund.

What is the biggest advantage of an ETF over other funds?

For whom would purchasing segregated funds would be most appropriate?

Which of the following can be a source of taxation even if not paid out to owners of a Canadian bond mutual fund?

In non-registered accounts,investors in high marginal tax brackets will normally prefer mutual funds that generate

Studies show that segregated funds

Because exchange-traded funds (ETFs)are passively managed,they are a good choice for an investor who is looking for tax efficiency.

Both segregated funds and mutual funds generally offer creditor protection in the event of bankruptcy.

Compare three factors (such as level of diversification,MERs,management and/or performance)between segregated funds,ETFs and mutual funds.Provide your own opinion as to the advantages or disadvantages.

A mutual fund that invests only in shares of gold mining companies would be called a

You own 500 units of a fund that now has a NAV of $12.30.What is your total investment worth?

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 4: Personal Investing - Investing in Mutual Funds

A stock mutual fund that pays higher-than-normal dividends is called a growth fund.

A conservative investor should only invest in a variety of bond mutual funds.

The possibility that the Bank of Canada may raise the prime rate is an example of

Closed-end mutual fund shares trade on stock exchanges and can sell at a premium or discount to their NAVPS.

Segregated funds are insurance products,but are similar to mutual funds as they offer a guarantee of as much as 100 percent of the funds invested upon maturity or the death of the owner.

Which of the following bond mutual funds have both the highest default risk and interest rate risk?

The most important considerations in choosing a mutual fund is your investment objectives and comparing fees and expenses charged.

A mutual fund with investments in bonds,stock,and preferred shares would best be described as

You own 600 units of a fund with a current NAV of $14.36.Your portion of the fund distributions is $718.00 of dividends,capital gains,and interest earnings.What will be your total units now?

A mutual fund that buys only the stocks of the TSX is a good example of a sector fund.

What is the biggest advantage of an ETF over other funds?

For whom would purchasing segregated funds would be most appropriate?

Which of the following can be a source of taxation even if not paid out to owners of a Canadian bond mutual fund?

In non-registered accounts,investors in high marginal tax brackets will normally prefer mutual funds that generate

Studies show that segregated funds

Because exchange-traded funds (ETFs)are passively managed,they are a good choice for an investor who is looking for tax efficiency.

Both segregated funds and mutual funds generally offer creditor protection in the event of bankruptcy.

Compare three factors (such as level of diversification,MERs,management and/or performance)between segregated funds,ETFs and mutual funds.Provide your own opinion as to the advantages or disadvantages.

A mutual fund that invests only in shares of gold mining companies would be called a

You own 500 units of a fund that now has a NAV of $12.30.What is your total investment worth?

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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