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Exam 13: Investing in Mutual Funds

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Question 61

Multiple Choice

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An annual fee charged by some mutual funds to cover marketing and selling expenses is the:

A) management fee.
B) back-end load.
C) transaction fee.
D) 12(b) -1 fee.
E) low-load.

F) A) and C)
G) C) and E)

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Question 62

Multiple Choice

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In the Wall Street Journal's listing of mutual funds,a "p" after the mutual fund name and before the NAV means that the particular mutual fund has a _____ associated with it.

A) front-end load
B) back-end load
C) 12(b) -1 fee
D) management fee
E) none of the above

F) D) and E)
G) B) and D)

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Question 63

Multiple Choice

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Like balanced fund that emphasizes growth in capital is called a(n) :

Closed-end mutual funds can trade at either a discount or a premium from their net asset value.

It is almost impossible to lose money in a mutual fund as the result of fraud or the mutual fund company's bankruptcy.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Advantages of exchange traded funds over mutual funds include [narrow | broad] industry selection.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -The primary investment objective of bond mutual funds is [growth | income].

A mutual fund quotation shows NAV $3.16,offer $3.80.If you want to buy 100 shares,you will pay $380.

Mutual funds are actually comprised of two or more companies.

The NAV of an open-ended mutual fund priced at $10 be if the load is 4%?

Closed-end investment companies are characterized by:

Closed-end mutual funds companies always buy their shares back from investors at NAV.

Exchange-traded funds have characteristics of both closed-end and open-end funds.

Mutual funds do not offer:

Closed-ended mutual funds are guaranteed,they cannot lose value.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -[Both load and no-load | Only no-load] funds can charge a redemption fee.

A mutual fund with an objective of both growth and income is a(n) :

Balanced funds invest in a mix of utility and growth equities.

Future fund performance is the real key to investment success with mutual funds.The most important element to examine when attempting to predict a fund's future performance is the:

The net asset value (NAV)per share is found by dividing the market value of the fund's securities less the fund's liabilities by the number of shares outstanding.