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Exam 16: Investing in Mutual Funds

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Question 81

Multiple Choice

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A closed-end fund is:

A) a fund that generally invests only in the stocks or other securities contained in a specific stock or securities index.
B) has only a certain number of shares available to investors when the fund is organized.
C) professionally managed so investors need not monitor the performance of the fund.
D) a fund whose shares are issued and redeemed by the investment company at the request of investors.
E) one whose shares trade only at end-of-the-day prices.

F) None of the above
G) A) and B)

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Question 82

Multiple Choice

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Which of the following is not true of index funds?

A) Sometimes they are called "passive" funds.
B) They do have managers that simply buy the securities in the index.
C) They are a low-cost alternative to managed mutual funds.
D) The S&P 500 index outperforms the majority of funds over many years.
E) The typical expense ratio for index funds is 0.50 percent or more.

F) A) and B)
G) B) and D)

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Question 83

True/False

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An investment company sponsoring a mutual fund must give existing shareholders a prospectus.

Investors 72 years or older are less likely to invest in mutual funds than any other age group.

Explain the difference between a load fund and a no-load fund.From a performance standpoint,is there a significant difference between mutual funds that charge commissions and those that do not?

A mutual fund that requires investors to make regular purchases over a specified period of time is called a:

If the dollar amount of total return on your mutual fund is $165 and the original cost of your investment is $1,200,then what is your percentage of total return?

A mutual fund that invests in companies expecting higher-than-average revenue and earnings growth is called a(n) ________ fund.

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

Norma Rose is buying shares in a mutual fund that invests in foreign stocks sold in securities markets throughout the world,excluding the United States.What type of mutual fund is she buying?

Which one of the following is not a withdrawal option for a mutual fund owner,who has a minimum NAV of $5,000?