Chapter I: Packaged Products

All of the following terms apply to fixed unit investment trusts EXCEPT: A. regulated B. managed C. redeemable D. registered

B

All of the following terms are related EXCEPT: A. Open-end fund / Mutual fund B. Closed-end fund / Mutual fund C. Open-end fund / Issued and Redeemed D. Closed-end fund / Publicly traded

B

The essential difference between an open end management company and a closed end management company is: A. management B. capitalization C. investment objective D. regulation

B

The purchase price of each of the following can be negotiated EXCEPT: A. Commercial paper B. Variable annuity C. Certificate of deposit D. Banker's acceptance

B

All of the following investment company securities are redeemable EXCEPT: A. open end fund shares B. fixed unit investment trusts C. closed end fund shares D. non-fixed unit investment trusts

C

Mutual Funds NAV Buy Chg ALPO Fund 9.51 10.39 +0.2 Audi Fund 6.82 7.45 +0.4 The funds listed are: A. open end management companies B. closed end management companies C. fixed UITs D. non-fixed UITs

A

The minimum price at which an open end fund share can be purchased is: A. Net Asset Value B. Net Asset Value plus a commission C. Market Price D. Market Price plus a commission

A

Which of the following terms apply to publicly traded fund shares? A. Negotiable with a one-time stock issuance B. Redeemable with a one-time stock issuance C. Negotiable with a continuous stock issuance D. Redeemable with a continuous stock issuance

A

Which statement is TRUE about investment companies? A. An open end fund is a type of management company B. A closed end fund can only be bought or sold at the end of day C. An open end fund may be traded throughout the day D. A closed end fund is a mutual fund

A

Which of the following can be purchased on margin? A. Mutual Funds B. Initial public offerings of Closed End Funds C. Closed End Funds trading on the NYSE D. Initial public offerings of Fixed Unit Investment Trusts

C

Which of the following securities is redeemable with the sponsor? A. Real estate investment trusts B. Closed end funds C. Mutual funds D. Corporate preferred stock

C

A closed-end management company is a: A. mutual fund B. publicly traded fund C. fixed unit investment trust D. non-fixed unit investment trust

B

All of the following are defined as "investment companies" under the Investment Company Act of 1940 EXCEPT: A. Face Amount Certificate Company B. Unit Investment Trust C. Oil and Gas Leasehold Partnership D. Management Company

C

A variable annuity is a(n): A. open end management company B. closed end management company C. fixed unit investment trust D. non-fixed unit investment trust

D

An open-end management company: A. continuously rebalances its portfolio to specified asset allocation percentages B. continuously trades the stocks in its portfolio to generate trading profits C. continuously liquidates appreciated positions with liquidations of depreciated positions D. continuously offers its own shares to investors

D

Which terms apply to mutual fund shares? A. Negotiable with a one-time stock issuance B. Negotiable with continuous stock issuance C. Redeemable with a one-time stock issuance D. Redeemable with continuous stock issuance

D

What're the 3 types of investment companies under the investment company act of 1940?

I. face amount certificate companies II. unit investment trusts III. management companies

If a mutual fund (open ended management company) does not impose a sales load (no load fund)

The purchaser pays the net asset value

If a mutual fund (open ended management company) imposes a "sales load"

The purchaser pays the next computed Net Asset Value plus a sales charge

fixed unit investment trusts are typically _______ trusts, where a diversified portfolio of bonds is assembled and placed into _______; with units of the _____ sold to investors. These are ________ securities that must be registered with the _____ and sold with a ________.

bond trust trust non exempt SEC prospectus

a mutual fund ________ issues new shares and ________ old shares representing ownership in the portfolio.

continually redeems

Mutual funds shares are issued and redeemed based on

end of day pricing

closed end management companies trade on an _______ and are bought at the ___________ plus a _________.

exchange prevailing market price commission

true or false new issues, including IPOs are marginable

false

true or false fixed unit investment trusts (UITs) are managed

false ARE NOT

true or false management companies can ONLY be open end, not closed end

false a management company can be both open and closed ended

true or false mutual funds trade like other securities

false mutual funds do not trade

Unit investment trusts include

fixed participating

where's a closed end fund traded?

in the market like stock

a mutual fund (open end management company) continuously

issues and redeems its own shares

The minimum price at which a closed end fund share can be purchased is:

market price + commission

open end funds are commonly known as

mutual funds

open end management companies include

mutual funds exchange traded funds

Assets - Liabilities for a mutual fund equals:

net asset value

what is the minimum price for an open end fund (mutual fund?)

net asset value

a variable annuity invests payments (funds) collected from annuity contract holders into ______ type(s) of securitie(s) - shares of _______

one management companies

A mutual fund has a ______ time _________ under a prospectus

one time share offering

the purchasing price of a variable annuity unit or a mutual fund share is the

public offering price as stated in the prospectus

closed end management companies include

publicly traded funds

mutual fund shares are issued by the fund when a ________ is made and are __________ by the fund when the shares are _____

purchase redeemed sold

Mutual funds do not trade. Instead, they're

redeemable with the sponsor

mutual funds are _____ with continuous stock issuance

redeemable, not negotiable

closed end management companies are not sold with a _____ charge

sales

open end management companies are sold with a _____ charge

sales

open end fund shares are redeemable with _______ and ________

the fund itself do not trade

what determines how the annuity of a variable annuity account will be received by the investor?

the performance of the securities in the separate account

Why're fixed unit investment trusts not managed

the portfolio of a fixed unit investment trust is fixed and doesn't change

what will the purchaser of a closed end fund need to pay if they want to have the trade executed?

the prevailing market price and a commission

a closed end fund share is purchased at what?

the prevailing market price plus a commission

what happens to trust units that the sponsor of a unit trust interest purchases

the sponsor will resell them to someone else

why're unit trust interests redeemable?

the trust sponsor makes a market in trust units the sponsor will buy these units back from the purchaser

true or false a closed end fund trades at whatever the prevailing market price is regardless whether its below, at, or above net asset value

true

true or false closed end fund shares are not redeemable. They trade on the market

true

true or false closed end funds trade like other securities

true

true or false closed end management companies are closed to new investment

true

true or false trust units are not traded

true

participating unit investment trusts are also know as

variable annuities