Packaged Products: Management Review Questions

Which statement is TRUE about the Investment Company Act of 1940's requirements for management companies? A: At least 40% of the Board of Directors must be "non-interested" persons B: At least 50% of the Board of Directors must be non-interested C: At least 60% of the Board of Directors must be non-interested D: At least 75% of the Board of Directors must be non-interested

A: At least 40% of the Board of Directors must be "non-interested" persons

Which statement is TRUE regarding closed end investment companies? A: Shares are issued in a one-time offering and then trade on an exchange or over-the-counter B: Shares are issued in a one-time offering and then are redeemable with the issuer C: Shares are continually issued and then trade on an exchange or over-the-counter D: Shares are continually issued and then are redeemable with the issuer

A: Shares are issued in a one-time offering and then trade on an exchange or over-the-counter

Which term BEST describes an ETF? A: Stock B: Mutual Fund C: Derivative D: Bond

A: Stock

The cost of investing in a mutual fund is measured by the: A: front load cost B: expense ratio C: comparative performance of the fund to the Standard and Poor's 500 index D: taxation of distributions at the investor level

A: front load cost, also known as sales charge

The primary function of the investment adviser is to: A: manage the fund B: set the investment objective for the fund C: safekeep the assets of the fund D: prepare the financial statements of the fund

A: manage the fund

Index ETFs are: A: passively managed and negotiable B: actively managed and negotiable C: passively managed and redeemable D: actively managed and redeemable

A: passively managed and negotiable

A balanced fund is one that: A: invests in securities found in one industry or geographic area B: allocates investment among common stocks, preferred stocks, and bonds of companies in various industries C: sells futures on market indices and uses short sales to limit risks of long positions D: invests solely in the common stocks of companies that exhibit faster than average gains in earnings

B: allocates investment among common stocks, preferred stocks, and bonds of companies in various industries

An investment in an inverse ETF would be profitable in a: A: bull market B: bear market C: stable market D: volatile market

B: bear market

"DIAmonds" are an American Stock Exchange traded index fund based on all stocks: A: rated "AA" or better B: in the Dow Jones Industrial Average C: of diamond mining companies D: that have outperformed the Dow Jones Industrial Average

B: in the Dow Jones Industrial Average

The highest fee in a money market fund is typically the: A: registration and tax fee B: management fee C: custodian fee D: audit fee

B: management fee

A breakpoint on a mutual fund purchase is permitted if: A: a group of family members in different households aggregate investment funds B: purchases of different mutual funds are made within the same fund family by the same individual C: an investment club purchases different mutual funds within the same fund family D: purchases of funds with the same investment objective are made in different fund families by the same individual

B: purchases of different mutual funds are made within the same fund family by the same individual

Exchange Traded Funds (ETFs) are: A: registered under the Investment Company Act of 1940 as closed-end management companies B: registered under the Investment Company Act of 1940 as open-end management companies C: only sold to institutional investors D: regulated by issuing exchange only since these are exempt securities

B: registered under the Investment Company Act of 1940 as open-end management companies

During a period of falling interest rates, which investment would be most profitable? A: 2X (Leveraged) S&P 500 Index ETF B: Inverse (Short) S&P 500 Index ETF C: 2X (Leveraged) 20+ Year Treasury ETF D: Inverse (Short) 20+ Year Treasury ETF

C: 2X (Leveraged) 20+ Year Treasury ETF

A mutual fund sponsor has three different income funds, holding AAA rated debt securities with similar maturities. Assuming that the expense ratios for the funds are identical, which fund would have the lowest yield from investment income? A: Government Bond Fund B: Corporate Bond Fund C: Municipal Bond Fund D: Any of the above

C: Municipal Bond Fund order highest yield to lowest: --corp --gov't --municipal

A retired investor seeks monthly income along with preservation of capital and minimum risk. Which of the following funds would be a suitable recommendation? A: Special situation fund B: Specialty fund C: U.S. Government securities fund D: Growth fund

C: U.S. Government securities fund

The Value Line Index fund consists of: A: all issues traded on the New York Stock Exchange B: only issues rated in the top 2 ratings by the Value Line Investment Survey C: all companies included in the Value Line Investment Survey D: small capitalization issues not listed on the New York Stock Exchange

C: all companies included in the Value Line Investment Survey

A new customer wishes to open an account at your firm by purchasing $5,000 of DEF mutual fund shares. He informs you that he has previously invested $30,000 in the fund at another broker-dealer. As the registered representative handling the account, you should tell the customer that: A: to qualify for the breakpoint, he must buy the shares from the other broker-dealer B: he must transfer the account from the other broker-dealer in order to qualify for the breakpoint C: he qualifies for a breakpoint sales charge reduction on the $5,000 purchase D: cannot qualify for a breakpoint sales charge reduction on the $5,000 purchase

C: he qualifies for a breakpoint sales charge reduction on the $5,000 purchase

Exchange traded funds are NOT: A: marginable B: negotiable C: redeemable D: diversifiable

C: redeemable

Mutual funds financial statements are sent to shareholders: A: monthly B: quarterly C: semi-annually D: annually

C: semi-annually

If a mutual fund distributes 99% of its Net Investment Income to its shareholders, how much of the Net Investment Income will be taxable? A: 0% B: 1% C: 99% D: 100%

A: 0% -if 90+% of fund is distributed, not taxable

Mutual funds that have an automatic reinvestment provision must reinvest: A: dividends at NAV and capital gains at NAV B: dividends at NAV and capital gains at POP C: dividends at POP and capital gains at NAV D: dividends at POP and capital gains at POP

A: dividends at NAV and capital gains at NAV

The majority of open-end investment companies impose: A: front-end load sales charges B: no sales load C: contingent deferred sales charges D: negotiated sales charges

A: front-end load sales charges -FINRA has a 8 1/2% maximum charge

Aggregation to qualify for a breakpoint is available to: A: A group of individuals who form an investment club B: A group of family members in the same household C: A single purchaser making purchases of the same type of fund in different fund families D: A group of individuals who form an investment partnership

B: A group of family members in the same household

SPDR ("Spiders"), QQQ ("Qubes") and DIA ("DIAmonds") are acronyms for: A: American Depositary Receipts B: Exchange Traded Funds C: Mutual Funds D: Collateralized Mortgage Obligations

B: Exchange Traded Funds

Under FINRA rules, a "no load" mutual fund: A: cannot charge a 12b-1 fee B: can charge a maximum annual 12b-1 fee of .25% C: can charge a maximum annual 12b-1 fee of .50% D: can charge a maximum annual 12b-1 fee of .75%

B: can charge a maximum annual 12b-1 fee of .25%

A customer has signed a Letter of Intent (LOI) to buy $100,000 of XYZZ Mutual Fund, reducing the sales charge from 4% to 2%. The customer has deposited $80,000 over the past 12 months. The position has a current NAV of $110,000. Which statement to the customer by a registered representative would be acceptable regarding completing the breakpoint? A: "You don't need to do anything because the fact that the net assets in the account exceed $100,000 completes your breakpoint" B: "You should redeem $20,000 of XYZZ and then take the proceeds to buy another $20,000 of XYZZ so the breakpoint is completed" C: "You can borrow $20,000 against your holding so that you can buy an additional $20,000 of XYZZ and complete the breakpoint" D: "You only need to deposit another $10,000 to buy XYZZ shares to complete the breakpoint because you are already $10,000 over the contractual breakpoint level"

C: "You can borrow $20,000 against your holding so that you can buy an additional $20,000 of XYZZ and complete the breakpoint"

Under FINRA rules, the maximum sales charge that may be imposed on a mutual fund purchase is: A: 6% of the amount invested B: 7% of the amount invested C: 8 1/2% of the amount invested D: 9% of the amount invested

C: 8 1/2% of the amount invested

When must a mutual fund prospectus be delivered to a customer? A: At, or prior to, discussing the investment with the customer B: At, or prior to, taking a purchase order from a customer C: At, or prior to confirmation of the purchase D: At, or prior to, settlement of the purchase

C: At, or prior to confirmation of the purchase

Shareholders in a management company have all of the following rights EXCEPT the right to: A: vote to change the investment objective of the fund B: vote for the Board of Directors C: set the management fee D: vote for the investment adviser

C: set the management fee

Exchange traded funds can NOT be: A: bought on margin B: sold short C: traded anytime during exchange hours D: redeemed with the sponsor

D: redeemed with the sponsor

A customer redeems 1,000 shares of ABC Fund. The computed Net Asset Value per share is $9.20. The Public Offering Price per share is $10.00. The fund has a 1/2% redemption fee. The customer will receive: A: $9,154 B: $9,200 C: $9,950 D: $10,000

A: $9,154 -- 1000 x 9.20 = 9200 --9200 x 0.995 = 9154

When comparing mutual fund "Class A" and "Class B" shares, which statement is TRUE? A: Class A shares impose a front-end sales charge; Class B shares impose a contingent deferred sales charge B: Class A shares impose a contingent deferred sales charge; Class B shares impose a front-end sales charge C: Class A shares impose a larger 12b-1 fee; Class B shares impose a smaller 12b-1 fee D: Class A shares are "back-loaded"

A: Class A shares impose a front-end sales charge; Class B shares impose a contingent deferred sales charge

Which statement is TRUE about mutual fund "Class A" shares? A: Class A shares impose no, or a very low, 12b-1 fee B: Class A shares impose a contingent deferred sales charge C: Class A shares may not offer breakpoints D: Class A shares are referred to as "level loads"

A: Class A shares impose no, or a very low, 12b-1 fee

A growth fund would likely invest in which of the following securities? A: Common stock options B: Public Utility stocks C: Treasury stock D: Treasury bonds

A: Common stock options

What risk should an investor in an ETN consider that would not be associated with an ETF? A: Credit Risk B: Liquidity Risk C: Market Risk D: Volatility Risk

A: Credit Risk

Which of the following terms are synonymous when talking about open-end funds? A: Investment Adviser / Portfolio Manager B: Underwriter / Dealer C: load / 12b-1 fee D: Net Asset Value/ acquisition price

A: Investment Adviser / Portfolio Manager

Which of the following customers is NOT allowed a breakpoint on mutual fund purchases? A: Investment club B: 401(k) plan participants C: Corporate purchaser D: Individual purchaser

A: Investment club

Which statement is TRUE regarding money market funds? A: Net Asset Value per share is constant at $1 B: Net Asset Value per share is based on supply and demand in the market C: As Total Assets in the fund increase, the shareholder has the same number of shares at an increased Net Asset Value per share D: Net Asset Value per share falls as market interest rates rise

A: Net Asset Value per share is constant at $1

If a fund distributes a capital gain to shareholders, which statement is TRUE? A: The capital gain is taxable if it is taken as a check B: The capital gain is not taxable if it is taken as a check C: The capital gain is taxable only if it is automatically reinvested in the fund D: The capital gain is not taxable if it is automatically reinvested in the fund

A: The capital gain is taxable if it is taken as a check

If a fund distributes a dividend to shareholders, which statement is TRUE? A: The dividend is taxable whether the investor takes it as a check or reinvests it B: The dividend is only taxable if it is taken as a check C: The dividend is only taxable if the client reinvests it D: The dividend is not taxable as long as the client buys more shares in any offering within the fund family

A: The dividend is taxable whether the investor takes it as a check or reinvests it

Which statement is TRUE about the expense ratio of a mutual fund? A: The lower the ratio, the more efficient the fund is B: The lower the ratio, the more expensive the fund is C: The higher the ratio, the greater the sales charge D: The higher the ratio, the more efficient the fund is

A: The lower the ratio, the more efficient the fund is

SPDRs are based on the: A: Standard and Poor's 100 Index B: Standard and Poor's 500 Index C: Standard and Poor's 1000 Index D: Standard and Poor's 5000 Index

B: Standard and Poor's 500 Index

An investment that does not require periodic rebalancing and which does not require the investor to actively change asset allocations over the investment time horizon is a(n): A: Specialty Fund B: Target Date Fund C: Managed Index Fund D: Hedge Fund

B: Target Date Fund

Which statement is TRUE regarding ETFs (Exchange Traded Funds)? A: The purchaser of an ETF is not required to receive a disclosure document because the shares are purchased in the secondary market B: The purchaser of an ETF is required to receive either a prospectus or a Product Description summarizing key information about the ETF C: The purchaser of an ETF is required to receive an Offering Memorandum because a public offering of securities is being made D: The purchaser of an ETF is required to receive an Official Statement, at, or prior to, settlement of the transaction

B: The purchaser of an ETF is required to receive either a prospectus or a Product Description summarizing key information about the ETF

Which statement is TRUE about aggregation rules to qualify for a breakpoint under a mutual fund Letter of Intent provision? A: To qualify for the lower sales charge, all purchases must be made in the same fund family and at the same broker-dealer B: To qualify for the lower sales charge, all purchases must be made in the same fund family, but can be made through different broker-dealers C: To qualify for the lower sales charge, purchases can be made in different fund families, but must all be made at the same broker-dealer D: To qualify for the lower sales charge, purchases can be made in different fund families and can be made at different broker-dealers

B: To qualify for the lower sales charge, all purchases must be made in the same fund family, but can be made through different broker-dealers

When a sales charge is not imposed on a fund purchase, nor on redemption, this is known as a: A: front-end load fund B: no load fund C: contingent deferred sales charge fund D: negotiated sales charge fund

B: no load fund

The custodian bank usually performs all of the following functions EXCEPT: A: sending dividends and capital gains distributions to shareholders B: selecting the investment manager C: preparing and mailing proxies to shareholders D: holding the portfolio of investments in safekeeping

B: selecting the investment manager

A customer sells stock out of his account receiving net proceeds of $28,000. The customer wishes to use the proceeds to buy ACME mutual fund shares. The fund has breakpoints at $5,000 intervals. The customer has no additional funds available for investment. You should recommend that the customer: A: reinvest $25,000 ACME fund, and use the remaining $3,000 to buy common stocks B: sign a Letter of Intent to buy $30,000 of ACME fund C: invest an additional $2,000 in ACME fund in addition to the proceeds from the stock sale D: refrain from investing in ACME fund until $30,000 has been accumulated

B: sign a Letter of Intent to buy $30,000 of ACME fund

A money market fund would invest in all of the following EXCEPT: A: Commercial Paper B: Treasury Bills C: American Depositary Receipts D: Banker's Acceptances

C: American Depositary Receipts -money market funds invest in short term maturity money market instruments

A client places an order to redeem DEFF Mutual Fund at 5:45 PM on a Friday. The redemption price that the customer will receive is the: A: NAV calculated as of the 4:00 PM close that occurred that Friday B: POP calculated as of the 4:00 PM close that occurred that Friday C: NAV calculated as of the 4:00 PM close that will occur the following Monday D: POP calculated as of the 4:00 PM close that will occur the following Monday

C: NAV calculated as of the 4:00 PM close that will occur the following Monday --it is the following monday because the mutual fund was redeemed after 4pm on friday

When comparing an ETN to an ETF, which statement is TRUE? A: ETNs have no credit risk B: ETFs have credit risk C: Only ETNs have both credit risk and market risk D: ETFs and ETNs both have credit risk and market risk

C: Only ETNs have both credit risk and market risk

Which statement is TRUE regarding mutual funds? A: That day's opening price is the basis for fund purchase price and redemption computations B: The next day's opening price is the basis for fund purchase price and redemption computations C: That day's closing price is the basis for fund purchase price and redemption computations D: The next day's closing price is the basis for fund purchase price and redemption computations

C: That day's closing price is the basis for fund purchase price and redemption computations

A customer puts $25,000 in the Class A shares of the mutual fund shown in the exhibit window under a Letter of Intent that obligates the customer to complete a $30,001 purchase amount to qualify for a lower sales charge. Prior to making the additional $5,001 purchase, the assets in the fund appreciate to $31,000. The customer does not make the additional $5,001 investment in the fund. Which statement is TRUE? A: The customer will qualify for the lower sales charge based on the asset appreciation and is not required to make the additional $5,001 purchase B: The customer must make the additional $5,001 investment in the fund otherwise the customer will forfeit the amount invested because the contract was not completed C: The customer is not required to make the additional $5,001 investment but the sales charge will be recalculated based on the lower investment amount D: The customer is not required to make the additional $5,001 investment in this fund, but must invest another $5,001 in any other fund offered by the same sponsor

C: The customer is not required to make the additional $5,001 investment but the sales charge will be recalculated based on the lower investment amount

All of the following statements are correct regarding the ex date for a mutual fund EXCEPT: A: The date is set by the Board of Directors of the Fund B: The ex-date is the date on which the fund's NAV per share is reduced for any distributions C: The ex-date is ratified by FINRA D: The ex-date is usually set at the business day following the record date

C: The ex-date is ratified by FINRA

Aggregation to qualify for a breakpoint is NOT available to: A: a group of family members in the same household that aggregates investment funds B: a single individual who has an accumulated position in a fund and who is making an additional purchase C: an investment club that purchases different mutual funds within the same fund family D: objectives in the same fund family

C: an investment club that purchases different mutual funds within the same fund family

An investor wishes to buy mutual fund shares with the primary objective of aggressive growth. Based on this information, the appropriate recommendation is a: A: balanced fund B: money market fund C: sector fund D: preferred stock fund

C: sector fund

A customer has signed a Letter of Intent to buy at least $50,000 of a mutual fund in return for getting a lowered sales charge. The customer has already invested $40,000, and the customer notices on his account statement that the current NAV of the position is $52,000. The fund is going to make a distribution of the $12,000 capital gain. The registered representative recommends that the customer take the capital gain as cash and use the proceeds to buy shares of the fund to finish the breakpoint. This suggestion by the registered representative is inappropriate because it was not disclosed that: A: the breakpoint has already been completed by the asset appreciation in the account B: customers can only complete breakpoints with money that is not obtained from mutual fund share liquidations C: the capital gain would be automatically reinvested at NAV if not taken in cash while the purchase of the shares would occur at POP including a sales charge D: if the capital gain were automatically reinvested, there would be no tax due, but if the capital gain is taken in cash, it is taxable

C: the capital gain would be automatically reinvested at NAV if not taken in cash while the purchase of the shares would occur at POP including a sales charge

All of the following statements are correct regarding the sponsor of a mutual fund EXCEPT: A: the sponsor establishes the fund B: the sponsor is also known as the fund underwriter C: the sponsor manages the fund D: the sponsor registers the fund with the Securities and Exchange Commission

C: the sponsor manages the fund

A customer places an order to buy mutual fund shares directly from the fund wholesaler, and therefore does not use a broker-dealer included in the fund's selling group. Under FINRA rules, all of the following statements are true EXCEPT: A: the wholesaler must be a registered FINRA member B: the customer must pay the Public Offering Price as described in the prospectus C: the wholesaler can offer the customer a lower sales charge since no concession will be paid to a selling group member D: pricing of the fund shares must conform to the requirements of the Investment Company Act of 1940

C: the wholesaler can offer the customer a lower sales charge since no concession will be paid to a selling group member

An investor buys 100 shares of an open-end investment company with a 4% contingent deferred sales charge. The sales charge is reduced by 1% for every full year that the fund is held. The investor redeems the 100 shares at an NAV of $20 per share after holding them for 1 year and 2 months. The investor will receive: A: $1,880 B: $1,900 C: $1,920 D: $1,940

D: $1,940 -2000 x 0.97 = 1940

A customer invests $1,000 in a money market fund. If the fund's assets appreciate by 10%, the customer will have: A: 100 shares @ $11.00 each B: 110 shares @ $10.00 each C: 1,000 shares @ $1.10 each D: 1,100 shares @ $1.00 each

D: 1,100 shares @ $1.00 each

Which statement is TRUE when comparing an index mutual fund to an index exchange traded fund? A: Mutual funds can be purchased on margin; exchange traded funds cannot be purchased on margin B: Mutual funds and exchange traded funds can both be purchased on margin C: Mutual funds and exchange traded funds can both be sold short D: Exchange traded funds can be sold short while mutual funds cannot be sold short

D: Exchange traded funds can be sold short while mutual funds cannot be sold short

To impose the maximum sales charge, under FINRA rules, mutual funds must offer investors all of the following EXCEPT: A: Breakpoints B: Rights of Accumulation C: Letter of Intent D: Family of Funds

D: Family of Funds

In a period of rising interest rates, an investor in a "Ginnie Mae" mutual fund is likely exposed to which of following? A: Increased Prepayment Risk B: Increased Reinvestment Risk C: Increased Default Risk D: Increased Extension Risk

D: Increased Extension Risk

During a period of rising interest rates, which investment would be profitable? A: 2X (Leveraged) S&P 500 Index ETF B: Inverse (Short) S&P 500 Index ETF C: 2X (Leveraged) 20+ Year Treasury ETF D: Inverse (Short) 20+ Year Treasury ETF

D: Inverse (Short) 20+ Year Treasury ETF

The provisions of the Investment Company Act of 1940 include all of the following EXCEPT: A: Minimum initial fund capital of $100,000 B: "Interested persons" on the Board of Directors cannot hold over 60% of the seats C: Changing the fund's investment objective requires a majority vote of the shareholders D: Setting maximum sales charges on mutual fund purchases

D: Setting maximum sales charges on mutual fund purchases

Which of the following would NOT reduce the Net Asset Value per share of a mutual fund? A: Asset depreciation B: Dividend distribution C: Capital gains distribution D: The fund sells a portfolio position to realize a large loss

D: The fund sells a portfolio position to realize a large loss

A closed end fund's Net Asset Value is $8.50. The market liquidation price of the fund would be: A: $8.50 minus a 12(b)-1 fee B: $8.50 minus a nominal commission C: $8.50 plus a maximum 5% load D: The prevailing market price

D: The prevailing market price

A "breakpoint sale" is: A: advising a customer to buy enough of a mutual fund to qualify for lowered sales charge shown in a breakpoint schedule B: advising a customer to buy an amount of a mutual fund that is just above the minimum threshold needed to qualify for a lowered sales charge shown in a breakpoint schedule C: encouraged under FINRA rules since the client pays a lower price D: a violation of FINRA rules

D: a violation of FINRA rules

A Special Situations Fund invests in: A: U.S. Government and Agency securities B: corporate bonds and preferred stock rated below investment grade C: a single industry or geographic area D: companies undergoing a takeover or bankruptcy

D: companies undergoing a takeover or bankruptcy

A customer buys $10,000 of Government Bond Fund shares from Acme Investors, a fund sponsor and broker-dealer. Acme is the sponsor for a variety of funds within the Acme "family." The ACME family has an "exchange feature" at NAV. The customer decides to exchange his Government Bond Fund shares for Growth Fund shares within the same family. All of the following statements are true EXCEPT the: A: customer's yield will decrease B: customer will have greater capital appreciation potential C: customer will have a tax event D: customer will pay a sales charge

D: customer will pay a sales charge

A 200% Leveraged Dow Jones Industrial Average Index ETF would be expected to move: A: up 5% in price when the DJIA moves up 10% B: up 10% in price when the DJIA moves up 15% C: down 5% in price when the DJIA moves down 10% D: down 10% in price when the DJIA moves down 5%

D: down 10% in price when the DJIA moves down 5%

A 200% Leveraged Inverse Dow Jones Industrial Average Index ETF would be expected to move: A: down 7.5% in price when the DJIA moves up 2.5% B: up 10% in price when the DJIA moves up 5% C: down 5% in price when the DJIA moves up 10% D: down 10% in price when the DJIA moves up 5%

D: down 10% in price when the DJIA moves up 5%

All of the following statements are true about money market funds EXCEPT: A: money market funds rarely have a sales charge B: all distributions are fully taxable as investment income C: most money market funds have a constant Net Asset Value per share of $1.00 D: money market funds have an objective of long term capital gains

D: money market funds have an objective of long term capital gains

Which of the following mutual fund terms are synonymous? A: Bid; Asking Price B: Bid; Public Offering Price C: Ask; Net Asset Value D: Ask; Public Offering Price

D: Ask; Public Offering Price

Which statement is TRUE regarding mutual fund offerings? A: Selling group members are allowed to discount mutual fund shares on their own B: Selling group members are allowed to create their own breakpoint tables C: Selling group members are allowed to sell mutual fund shares for more than the Public Offering Price D: Selling group members cannot sell mutual fund shares for more than the Public Offering Price

D: Selling group members cannot sell mutual fund shares for more than the Public Offering Price

An investor buys $10,000 of a "regulated" mutual fund investing solely in municipal securities. Which statement is TRUE regarding the federal tax treatment of the interest income? A: The investor must pay federal income tax on all interest received, since payments come from the investment company B: The investor must pay tax on any distributions received from the investment company, while the company has no tax obligation C: The investor has no tax liability on any distributions received, while the investment company must pay tax on any retained income D: The investor has no tax liability on distributions received, and the investment company has no tax liability on retained income

D: The investor has no tax liability on distributions received, and the investment company has no tax liability on retained income

The formula for the expense ratio of a mutual fund is: A: Net Investment Income / Distributions to Shareholders B: Net Investment Income - Distributions to Shareholders C: Total Expenses - Total Net Assets D: Total Expenses / Total Net Assets

D: Total Expenses / Total Net Assets -lower the ratio, lower the expenses, more net investment income for investors

A fund which invests in one type of industry or one geographic area is known as a: A: speculative fund B: dual purpose fund C: special situations fund D: specialty fund

D: specialty fund

Mutual Fund Sales Charge

(ask-bid)/ask

The maximum annual 12b-1 fee permitted under FINRA rules is: A: 0.25% B: 0.75% C: 8 1/2% D: 9%

B: 0.75%

ETFs are: A: non-negotiable B: redeemable C: traded on exchanges D: traded over-the-counter

C: traded on exchanges