Finance Quiz #13

Which of the following are major reasons that investors purchase mutual funds? Diversification and professional management.
What percentage of all mutual funds are exchange-traded funds? 13%
Which type of fund has the prices determined by factors of supply and demand like the prices of a stock? Closed-end fund
Which of the following is a fund that invests in the stocks or securities contained in a specific stock or securities index? Exchange-traded fund
Whose shares are issued and redeemed by the investment company at the request of investors? Open-end fund
How is an ETF similar to a closed-end fund? All of these are correct.
Which of the following is correct for a closed-end fund? The price of its shares is determined by supply and demand, by the value of stocks in the portfolio, and by investor expectations.
Many mutual funds charge a commission every time shares are purchased by investors. These are called Load funds.
Many exceptions exist, but the average load charge for mutual funds is 3-5%.
The average upfront sales charge for the purchase of a no-load mutual fund is 0%.
A no-load mutual fund Can charge a 12b-1 fee of up to 0.25% of its assets.
A contingent deferred sales load is known as a Back-end load, B fund and redemption fee are all correct.
Which class of shares charges a commission when withdrawals are made over the first five years? B
Which of the following types of stock funds invests in stock issued by companies with a long history of paying dividends? Equity income funds
Which of the following types of stock funds invests in stock issued by companies expecting higher-than-average revenue and earnings growth? Growth funds
Which of the following types of stock funds invests in the same companies included in the Standard & Poor’s 500 stock index? Index funds
Which of the following types of stock funds invests in stock issued by companies throughout the world outside the United States? International funds
Which of the following types of stock funds invest in stock traded within one specific region of the world? Regional funds
Sally wants to invest in a fund that invests only in stock. Which of the following will meet her needs? Midcap funds
Thomas wants to invest in a fund that invests in stock, bonds, and money market instruments. Which of the following will meet his needs? Asset allocation funds
Val wants to invest in a fund whose primary objective is to conserve principal, provide income, and provide long-term growth. Which of the following will best meet her needs? Balanced funds
An example of a lifecycle fund is a fund that Assists investors with planning for retirement by a specific date.
If you start a new job and are offered the opportunity to participate in the company’s 401(k) or 403(b) retirement plan, which of the following decisions can affect your financial future? All of these decisions can affect your financial future.
Time is an important factor when evaluating a managed mutual fund for which of the following? The length of time that the present fund manager has been managing the fund.
Which of the following is not correct? A managed fund will outperform an index fund only 60% of the time.
Professional advisory services provide research on mutual funds in a report that includes all of the following areas except All of these are included by professional advisory services.
Sally wants to invest in a mutual fund. The mutual fund must provide a(n) ________ to her as a potential investor. prospectus
Which of the following provides up-to-date information that can help investors made decisions quickly without having to make a trip to the library? Internet
Which of the following have reduced or eliminated mutual fund coverage? Newspapers
Which of the following contains a letter from the president of the investment company, detailed financial information, a schedule of investments, and a letter from the fund’s independent auditors? Mutual fund annual report
How do mutual funds provide returns to their shareholders? All of these.
If you hold mutual fund shares in your Roth individual retirement account, the taxes on reinvested income will be Eliminated.
All of the following are valid ways to purchase open-end mutual funds except All of the ways listed are valid purchase options.

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