Question 1

Contingent deferred sales loads generally:

Accepted Answer

A)   apply until the shares you own are in the fund for 10 years or more.
B)   apply regardless of how long your shares have been invested.
C)   increase as the length of time you have been in the fund increases.
D)   decline gradually until there is no withdrawal fee.
E)   apply only for the first year funds are invested.F) A) and C)
G) A) and E)

Question 2

All the different fees and fund operating costs are often referred to as a(n) :

Accepted Answer

A)   investment ratio.
B)   expense ratio.
C)   financial ratio.
D)   expense turnover.
E)   management ratio.F) C) and D)
G) A) and B)

Question 3

While many exceptions exist, the average load charge for mutual funds ranges between what percent of the purchase price?

Accepted Answer

A)   1-3
B)   2-4
C)   3-5
D)   4-6
E)   5-7F) A) and D)
G) B) and D)

Question 4

Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee is a class ____________ fund.

Accepted Answer

A)   A
B)   B
C)   C
D)   D
E)   EF) C) and E)
G) C) and D)

Question 5

A mutual fund that provides tax-exempt interest income is referred to as a long-term U.S. bond fund.

Accepted Answer

A) True 
 B)False

Question 6

Approximately ____________ percent of all mutual funds are open-end funds.

Accepted Answer

A)   5
B)   6
C)   30
D)   72
E)   92F) C) and D)
G) A) and E)

Question 7

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund is he buying?

Accepted Answer

A)   Socially responsible fund
B)   Sector fund
C)   Small-cap fund
D)   Index fund
E)   Growth fundF) B) and C)
G) All of the above

Question 8

Tax information for mutual funds is reported as part of the year-end statement or IRS Form 1099-DIV.

Accepted Answer

A) True 
 B)False

Question 9

A municipal bond fund:

Accepted Answer

A)   is too risky for most investors.
B)   provides investors with federally tax-free interest income.
C)   invests in bonds that are backed by the federal government.
D)   is a risk-free investment.
E)   invests solely in Treasury bonds.F) A) and E)
G) A) and C)

Question 10

Which of the following is true?

Accepted Answer

A)   More than 87 million individual Americans own mutual funds.
B)   Nearly half of all U.S. households own mutual funds.
C)   There are more than 12,000 mutual funds available.
D)   By the end of 2009, the combined value of assets held by mutual funds exceeded 12.2 trillion dollars.
E)   All of these statements are true.F) D) and E)
G) C) and D)

Question 11

An investment company sponsoring a mutual fund must give potential investors a(n) :

Accepted Answer

A)   12b-1 report.
B)   prospectus.
C)   disclosure/evaluation form.
D)   redemption fee sheet.
E)   annual report.F) All of the above
G) B) and D)

Question 12

An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index.

Accepted Answer

A) True 
 B)False

Question 13

While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds.

Accepted Answer

A) True 
 B)False

Question 14

Contingent deferred sales loads may also be referred to as ____ loads.

Accepted Answer

A)   front-end
B)   back-end
C)   level
D)   purchase
E)   investitureF) A) and B)
G) C) and D)

Question 15

Which one of the following is not a withdrawal option for a mutual fund?

Accepted Answer

A)   Withdrawing a specified, dollar amount each investment period
B)   Liquidating, or "selling off" a certain number of shares each investment period
C)   Withdrawing a fixed percentage of asset growth
D)   Withdrawing all income that results from dividends and capital gains distributions
E)   Withdrawing a stated amount and treating it as a short-term loanF) A) and D)
G) A) and C)

Question 16

The major reasons why investors purchase mutual funds are professional management and diversification.

Accepted Answer

A) True 
 B)False

Question 17

The management fee for most mutual funds ranges between ______ percent.

Accepted Answer

A)   0.25 to 1.5
B)   1.5 to 3
C)   3 to 4
D)   5 to 6 1/2
E)   7 to 8 1/2F) A) and B)
G) A) and C)

Question 18

Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:

Accepted Answer

A)   1 percent or less.
B)   between 1 and 2 percent.
C)   between 2 and 3 percent.
D)   between 3 and 4 percent.
E)   over 4 percent.F) B) and C)
G) B) and E)

Exam 16: Investing in Mutual Funds

Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee is a class ____________ fund.

Correct Answer
verified

While many exceptions exist, the average load charge for mutual funds ranges between what percent of the purchase price?

Correct Answer
verified

The management fee for most mutual funds ranges between ______ percent.

Correct Answer
verified

While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds.

Correct Answer
verified

The major reasons why investors purchase mutual funds are professional management and diversification.

Correct Answer
verified

Which one of the following is not a withdrawal option for a mutual fund?

Correct Answer
verified

Contingent deferred sales loads may also be referred to as ____ loads.

Correct Answer
verified

An investment company sponsoring a mutual fund must give potential investors a(n) :

Correct Answer
verified

An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index.

Correct Answer
verified

A municipal bond fund:

Correct Answer
verified

A mutual fund that provides tax-exempt interest income is referred to as a long-term U.S. bond fund.

Correct Answer
verified

Approximately ____________ percent of all mutual funds are open-end funds.

Correct Answer
verified

Tax information for mutual funds is reported as part of the year-end statement or IRS Form 1099-DIV.

Correct Answer
verified

Which of the following is true?

Correct Answer
verified

All the different fees and fund operating costs are often referred to as a(n) :

Correct Answer
verified

Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:

Correct Answer
verified

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund is he buying?

Correct Answer
verified

Contingent deferred sales loads generally:

Correct Answer
verified

Exam 16: Investing in Mutual Funds

Another name for a mutual fund that doesn't charge a load, but does charge an ongoing higher 12b-1 fee is a class ____________ fund.

Correct AnswerverifiedShow Answer

While many exceptions exist, the average load charge for mutual funds ranges between what percent of the purchase price?

Correct AnswerverifiedShow Answer

The management fee for most mutual funds ranges between ______ percent.

Correct AnswerverifiedShow Answer

While advisory services provide detailed information on common and preferred stocks, there are no advisory services that provide information on mutual funds.

Correct AnswerverifiedShow Answer

The major reasons why investors purchase mutual funds are professional management and diversification.

Correct AnswerverifiedShow Answer

Which one of the following is not a withdrawal option for a mutual fund?

Correct AnswerverifiedShow Answer

Contingent deferred sales loads may also be referred to as ____ loads.

Correct AnswerverifiedShow Answer

An investment company sponsoring a mutual fund must give potential investors a(n) :

Correct AnswerverifiedShow Answer

An exchange-traded fund, commonly referred to as an ETF is a fund that invests in the stocks contained in a specific stock or securities index.

Correct AnswerverifiedShow Answer

A municipal bond fund:

Correct AnswerverifiedShow Answer

A mutual fund that provides tax-exempt interest income is referred to as a long-term U.S. bond fund.

Correct AnswerverifiedShow Answer

Approximately ____________ percent of all mutual funds are open-end funds.

Correct AnswerverifiedShow Answer

Tax information for mutual funds is reported as part of the year-end statement or IRS Form 1099-DIV.

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

All the different fees and fund operating costs are often referred to as a(n) :

Correct AnswerverifiedShow Answer

Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:

Correct AnswerverifiedShow Answer

Christopher Fishbone is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund is he buying?

Correct AnswerverifiedShow Answer

Contingent deferred sales loads generally:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified