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Exam 4: Mutual Funds and Other Investment Companies

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Question 31

Multiple Choice

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In the 1970 study,Malkiel found that mutual funds that do well in one period,have an approximately ________ chance of doing well in the subsequent ear period.

A) 33%
B) 52%
C) 65%
D) 85%

E) All of the above
F) C) and D)

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Question 32

Multiple Choice

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Mutual funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector,are called ____________________.

A) asset allocation funds
B) balanced funds
C) index funds
D) income funds

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

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Question 33

Multiple Choice

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As of 2008,approximately _____ of mutual fund assets were invested in bond funds.

In 2000,the SEC instituted new rules that require funds to disclose _____.

You are considering investing in one of several mutual funds.All the funds under consideration have various combinations of front-end and back-end loads and/or 12b-1 fees.The longer you plan on remaining in the fund you choose,the more likely you will prefer a fund with a __________ rather than a __________,everything else equal.

______ are partnerships of investors with portfolios that are larger than most individual investors but are still too small to warrant managing on a separate basis.

If you place an order to buy or sell a share of a mutual fund during the trading day the order will be executed at

An official description of a particular mutual fund's planned investment policy can be found in the fund's _____________.

A mutual fund has $50 million in assets at the beginning of the year and 1 million shares outstanding throughout the year.Throughout the year assets grow at 12%.The fund imposes a 12b-1 fee on all shares equal to 1%.The fee is imposed on year end asset values.If there are no distributions what is the end of year NAV for the fund?

As of 2008,approximately _____ of mutual fund assets were invested in money market funds.

Higher portfolio turnover I.results in greater tax liability for investors II.results in greater trading costs for the fund,which investors have to pay for III.is a characteristic of asset allocation funds

In a recent study,Malkiel finds that evidence of persistence in the performance of mutual funds,________________ in the 1980s.

Management fees for open-end and closed-end funds,typically range between _____ and _____.

Net Asset Value is defined as ________________________.

The offer price of an open-end fund is $18.00 and the fund is sold with a front-end load of 5%? What is the fund's NAV?

The top Morningstar mutual fund performance rating is ________.

As of 2008,approximately _____ of mutual fund assets were invested in equity funds.

Rank the following fund category from most risky to least risky. I.Equity growth fund II.Balanced fund III.Sector fund IV.Money market fund

Which of the following funds is most likely to have a debt ratio of 70% or higher?

Consider a mutual fund with $300 million in assets at the start of the year,and 12 million shares outstanding.If the gross return on assets is 18% and the total expense ratio is 2% of the year end value,what is the rate of return on the fund?