Question 1

Which of the following options can a mutual fund investor use to purchase shares in an open-end fund?

Accepted Answer

A)  regular accounts.
B)  voluntary savings plan.
C)  contractual savings plan.
D)  reinvestment plan.
E)  all of the options listed in the other answersF) C) and E)
G) A) and B)

Question 2

A mutual fund that only invests in companies outside the United States is called a(n) ____________ fund.

Accepted Answer

A)  growth-income
B)  income
C)  international
D)  industry
E)  globalF) C) and D)
G) A) and C)

Question 3

Tiffany Scott puts $10,000 into a load mutual fund.She knows that her up-front sales commission is 6%.How much of her money actually goes to buy shares in the mutual fund?

Accepted Answer

A)  $10,000
B)  $9,400
C)  $600
D)  $10,600
E)  $950F) C) and D)
G) B) and D)

Question 4

Typically,you must invest at least $15,000,to open a mutual fund account.

Accepted Answer

A) True 
 B)False

Question 5

The value of a mutual fund's portfolio minus the mutual fund's liabilities,divided by the number of shares outstanding is called the:

Accepted Answer

A)  Book value.
B)  Outstanding balance.
C)  Libor rate.
D)  Net asset value.
E)  Accounting valuE.F) A) and E)
G) A) and B)

Question 6

High-yield bond funds are sometimes referred to as junk bond funds.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an advantage associated with purchasing a mutual fund?

Accepted Answer

A)  no fund management fees
B)  ability to control the timing of the capital gains distributions
C)  total elimination of market risk
D)  switching privileges within the same fund family
E)  all of items listed in the other answersF) C) and D)
G) B) and E)

Question 8

A mutual fund that invests in the common stocks of companies in the same industry is called a(n) ____________ fund.

Accepted Answer

A)  growth-income
B)  income
C)  sector
D)  small-cap
E)  money marketF) B) and E)
G) A) and B)

Question 9

A fee that some investment companies charge for advertising and marketing a mutual fund is called a:

Accepted Answer

A)  14A-1 fee.
B)  12b-1 fee.
C)  18-2 fee.
D)  403(b) fee.
E)  401(k) feE.F) D) and E)
G) A) and D)

Question 10

Which of the following would be found in a mutual fund's prospectus?

Accepted Answer

A)  statement describing the risk factors associated with the fund
B)  description of the fund's past performance
C)  information about the fund's management
D)  the process for buying and selling shares in the fund
E)  all of the information in the other answersF) C) and E)
G) A) and B)

Question 11

When you decide to redeem shares in an open-end mutual fund,the only option is to sell a specific number of shares.

Accepted Answer

A) True 
 B)False

Question 12

When you invest in Class A shares,you pay a sales commission when you sell your mutual fund shares.

Accepted Answer

A) True 
 B)False

Question 13

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 E)
G) B) and C)

Exam 16: Investing in Mutual Funds

Which of the following is an advantage associated with purchasing a mutual fund?

Correct Answer
verified

Which of the following options can a mutual fund investor use to purchase shares in an open-end fund?

Correct Answer
verified

High-yield bond funds are sometimes referred to as junk bond funds.

Correct Answer
verified

When you invest in Class A shares,you pay a sales commission when you sell your mutual fund shares.

Correct Answer
verified

Typically,you must invest at least $15,000,to open a mutual fund account.

Correct Answer
verified

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

Correct Answer
verified

When you decide to redeem shares in an open-end mutual fund,the only option is to sell a specific number of shares.

Correct Answer
verified

A mutual fund that only invests in companies outside the United States is called a(n) ____________ fund.

Correct Answer
verified

Tiffany Scott puts $10,000 into a load mutual fund.She knows that her up-front sales commission is 6%.How much of her money actually goes to buy shares in the mutual fund?

Correct Answer
verified

A mutual fund that invests in the common stocks of companies in the same industry is called a(n) ____________ fund.

Correct Answer
verified

The value of a mutual fund's portfolio minus the mutual fund's liabilities,divided by the number of shares outstanding is called the:

Correct Answer
verified

Which of the following would be found in a mutual fund's prospectus?

Correct Answer
verified

A fee that some investment companies charge for advertising and marketing a mutual fund is called a:

Correct Answer
verified

Exam 16: Investing in Mutual Funds

Which of the following is an advantage associated with purchasing a mutual fund?

Correct AnswerverifiedShow Answer

Which of the following options can a mutual fund investor use to purchase shares in an open-end fund?

Correct AnswerverifiedShow Answer

High-yield bond funds are sometimes referred to as junk bond funds.

Correct AnswerverifiedShow Answer

When you invest in Class A shares,you pay a sales commission when you sell your mutual fund shares.

Correct AnswerverifiedShow Answer

Typically,you must invest at least $15,000,to open a mutual fund account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When you decide to redeem shares in an open-end mutual fund,the only option is to sell a specific number of shares.

Correct AnswerverifiedShow Answer

A mutual fund that only invests in companies outside the United States is called a(n) ____________ fund.

Correct AnswerverifiedShow Answer

Tiffany Scott puts $10,000 into a load mutual fund.She knows that her up-front sales commission is 6%.How much of her money actually goes to buy shares in the mutual fund?

Correct AnswerverifiedShow Answer

A mutual fund that invests in the common stocks of companies in the same industry is called a(n) ____________ fund.

Correct AnswerverifiedShow Answer

The value of a mutual fund's portfolio minus the mutual fund's liabilities,divided by the number of shares outstanding is called the:

Correct AnswerverifiedShow Answer

Which of the following would be found in a mutual fund's prospectus?

Correct AnswerverifiedShow Answer

A fee that some investment companies charge for advertising and marketing a mutual fund is called a:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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