Question 1

For most mutual funds, the net asset value is calculated:

Accepted Answer

A)   daily.
B)   quarterly.
C)   weekly.
D)   yearly.
E)   whenever an investor calls and requests a price quote.F) C) and D)
G) D) and E)

Question 2

Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio.

Accepted Answer

A) True 
 B)False

Question 3

A mutual fund in which no sales charge is paid by the individual investor is called a(n)  ____________ fund.

Accepted Answer

A)   closed-end
B)   open-end
C)   no-load
D)   unloaded
E)   net asset value fundF) A) and B)
G) None of the above

Question 4

In a newspaper quotation, which of the following letters would indicate if a mutual fund is a no load fund?

Accepted Answer

A)   N
B)   R
C)   FR
D)   B
E)   It is impossible to tell if a mutual fund is a no load fund by looking in the newspaper.F) All of the above
G) C) and D)

Question 5

A mutual fund is:

Accepted Answer

A)   recommended for expert investors only.
B)   used exclusively for retirement accounts.
C)   an investment chosen by people who pool their money to buy financial securities
D)   risk-averse investors.
E)   a risk-free investment.F) A) and B)
G) B) and D)

Question 6

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

Accepted Answer

To purchase shares in an open-end mutual...

Question 7

An individual who helps investors decide when to switch their investment from one fund to another fund is called a(n)

Accepted Answer

A)   financial planner
B)   fund evaluator.
C)   opportunity timer.
D)   market timer.
E)   fund consultant.F) B) and D)
G) A) and C)

Question 8

Larry Bander purchased 280 shares of the New Horizons Growth Fund. The net asset value for each share at the time of purchase was $27. If this fund charges a 3.5 percent load, what is the commission amount he will pay the investment company?

Accepted Answer

A)   $27.00
B)   $9.80
C)   $264.60
D)   $100
E)   $280.00F) All of the above
G) C) and E)

Question 9

All mutual funds charge a management expense ratio (MER).

Accepted Answer

A) True 
 B)False

Question 10

A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n)  ____________ fund.

Accepted Answer

A)   balanced
B)   growth
C)   income
D)   equity
E)   money marketF) B) and D)
G) A) and B)

Question 11

In a newspaper quotation, NAV stands for "not accessible value."

Accepted Answer

A) True 
 B)False

Question 12

Exchange traded funds can be traded at beginning of the day prices.

Accepted Answer

A) True 
 B)False

Question 13

Index funds are bought at beginning-of-day prices.

Accepted Answer

A) True 
 B)False

Question 14

Anne Lily purchased 260 shares of the New Sage Growth Fund. The net asset value for each share at the time of purchase was $19. If this fund charges a 4.5 percent load, what is the commission amount she will pay the investment company?

Accepted Answer

A)   $19.00
B)   $222.30
C)   $500.00
D)   $1170.00
E)   No commission is chargedF) A) and B)
G) A) and C)

Question 15

The least liquid of all the types of mutual funds is __________________

Accepted Answer

A)   a balanced asset allocation fund
B)   a money market fund
C)   an equity or common stock fund
D)   a real estate mutual fund
E)   an ethical fundF) A) and B)
G) A) and E)

Question 16

The net asset value per mutual fund share is the current market value of the securities contained in the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 17

Another name for a mutual fund that charges a contingent deferred sales load is a(n)  ____________ fund.

Accepted Answer

A)   bare bones
B)   end state
C)   bare back
D)   back-end
E)   pay laterF) B) and C)
G) D) and E)

Question 18

An affordable way for investors to invest in a diversified basket of securities; provides the diversification of an index fund with the flexibility of a stock is with a(n)  ____________ fund.

Accepted Answer

A)   closed-end
B)   open-end
C)   exchange-traded
D)   index
E)   convertibleF) A) and B)
G) A) and C)

Question 19

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential.

Accepted Answer

A) True 
 B)False

Question 20

The most popular and least complicated method of purchasing shares in an open-end mutual fund is through a

Accepted Answer

A)   regular account.
B)   voluntary savings plan.
C)   contractual savings plan.
D)   minimum withdrawal plan.
E)   free contract plan.F) C) and D)
G) A) and E)

Exam 13: Investing in Mutual Funds

Anne Lily purchased 260 shares of the New Sage Growth Fund. The net asset value for each share at the time of purchase was $19. If this fund charges a 4.5 percent load, what is the commission amount she will pay the investment company?

Correct AnswerverifiedShow Answer

A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n) ____________ fund.

Correct AnswerverifiedShow Answer

Exchange traded funds can be traded at beginning of the day prices.

Correct AnswerverifiedShow Answer

The net asset value per mutual fund share is the current market value of the securities contained in the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding.

Correct AnswerverifiedShow Answer

In a newspaper quotation, NAV stands for "not accessible value."

Correct AnswerverifiedShow Answer

Capital gain distributions are the payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio.

Correct AnswerverifiedShow Answer

The most popular and least complicated method of purchasing shares in an open-end mutual fund is through a

Correct AnswerverifiedShow Answer

An affordable way for investors to invest in a diversified basket of securities; provides the diversification of an index fund with the flexibility of a stock is with a(n) ____________ fund.

Correct AnswerverifiedShow Answer

The family of funds concept makes it convenient for shareholders to switch their investments among funds as different funds offer more potential.

Correct AnswerverifiedShow Answer

For most mutual funds, the net asset value is calculated:

Correct AnswerverifiedShow Answer

In a newspaper quotation, which of the following letters would indicate if a mutual fund is a no load fund?

Correct AnswerverifiedShow Answer

Index funds are bought at beginning-of-day prices.

Correct AnswerverifiedShow Answer

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Correct AnswerverifiedShow Answer

The least liquid of all the types of mutual funds is __________________

Correct AnswerverifiedShow Answer

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

Correct AnswerverifiedTo purchase shares in an open-end mutual...View AnswerShow Answer

An individual who helps investors decide when to switch their investment from one fund to another fund is called a(n)

Correct AnswerverifiedShow Answer

All mutual funds charge a management expense ratio (MER).

Correct AnswerverifiedShow Answer

Another name for a mutual fund that charges a contingent deferred sales load is a(n) ____________ fund.

Correct AnswerverifiedShow Answer

A mutual fund is:

Correct AnswerverifiedShow Answer

Larry Bander purchased 280 shares of the New Horizons Growth Fund. The net asset value for each share at the time of purchase was $27. If this fund charges a 3.5 percent load, what is the commission amount he will pay the investment company?

Correct AnswerverifiedShow Answer

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To purchase shares in an open-end mutual...
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