Personal Finance Final Ch 13

Which of the following types of stock funds invests ins tock issued by companies with a long history of paying dividends?

Equity income funds

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

Which of the following provides up-to-date information quickly without having to make a trip to the library?

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

Joseph purchased 100 shares of ABCD Growth fund for $10.00 per share for a total investment of $1,000. At the end of one year, he sold his investment for $11.20 per share. What is his total capital gain?

$120

The Anderson Balanced mutual fund charges a sales load of 4.85%. If you invest $15,000, how much of your investment will actually be used to purchase shares in the fund?

$14,272,50

Francesca withdrew $7,000 from B shares that she owned in the Already Been Counted mutual fund within one year of her purchase. If she must pay a 5% contingent deferred sales fee, what will her total fee be?

$350.00

The investments in the Alamo Basics Contingency Fund have a current market value of $800 million. The fund also has liabilities that total $60 million. If this mutual fund has 20 million shares, what is the net asset value per share?

$37

Francesca withdrew $7,000 from B shares that she owned in the Already Been Counted mutual fund within one year of her purchase. If she must pay a 5% contingent deferred sales fee, what amount will she actually receive?

$6,650

Nicholas purchased 150 shares of ABC Mutual Fund at $10.50 and sold them one year later at a price of $14.50. His total capital gain was

$600

The Anderson Balanced mutual fund charges a sales load of 4.85%. If you invest $15,000, how much must you pay in commissions?

$727.50

The net asset value is calculated as

(Current market value of portfolio - Liabilities)/Number of shares outstanding.

the average upfront sales charge for the purchase of a no-load mutual fund is

0%

A fee charged to defray the costs of advertising and marketing a mutual fund is called a ______ fee.

12b-1

Shelby purchased 100 shares of ABCD Growth fund for $10.00 per share. She had income dividends of $15, capital gain distributions of $35, and a capital gain of $120 in the year she sold her shares. What was her percentage of total return on this investment?

17%

Many exceptions exist, but the average load charge for a mutual funds is

3-5%

How do mutual funds provide returns to their shareholders?

All of these: income dividends, capital gain distributions, and capital agains.

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

An example of a lifecycle fund is a fund that

Assits investors with planning for retirement by a specific date.

What percentage of all mutual funds re closed-ended funds?

6%

A load fund is allowed to collect a sales charge (commission) as high as ___ of the purchase price for investments.

8.5%

Which of the following shares charges a commission (sales charge) when shares a purchased.

A

Which class of shares charges a commission when withdrawals are made over the first five years.

B

Which of the following is not correct?

A managed fund will outperform an index fund only 60% of the time.

A contingent deferred sales load is known as

A, B and C are all correct. A back-end load, B fund, Redemption feed.

All of the following are valid ways to purchase open-end mutual funds except

All of the ways listed are valid purchase options.

How is an ETF similar to a closed-end fund?

All of these are correct.

Professional advisory services provide research on mutual funds in a report that includes ll of the following areas except

All of these are included by professional advisory services

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.

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

A problem with taxation of mutual funds is

Being required to report reinvested income dividends and capital gain distributions on your federal tax return as current income.

Which class of shares does not impose a sales load or contingent deferred sales fee but charges a higher 12b-1 fee than the other classes?

C

A no-load mutual fund

Can charge a 12b-1 fee of up to 0.25% of its assets

When you sell your shares in a mutual fund, you may receive a profit that results from an increase in value called

Capital gain

Payments to a fund's shareholders that result from the sale of securities in the fund's portfolio are

Capital gain distributions

Which type of fund has the prices determined by factors of supply and demand like the prices of a stock?

Closed-end funds

Professional advisory services provide detailed information bout mutual funds. which of the following is not a professional advisory service?

Dun and Moody's

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 int he same companies included int he Standard and Poor's 500 stock index?

Index funds

Which of the following types of stock funds invested in stock issued y companies throughout the world outside the United States?

International funds

Which of the following is true about mutual funds and taxes?

Investment companies are required to send each shareholder a year-end statement that specifies how much each relieved in income dividends and capital gain distributions.

Which of the following is not correct about the 12b-1 fee?

It needs to be disclosed in the annual report but not int he prospectus.

Many mutual finds charge a commission every time shares are purchased by investors. These are called

Load funds

Which of the following are major reasons that investors purchase mutual funds

Loads of up to 8.5%

Sally want sot invest in a fund that invests only in stock. Which of the following will meet her needs?

Midcap funds

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 a funds independent auditors?

Mutual fund annual report

Which of the following have reduced or eliminated mutual fund coverage?

Newspapers

Which of the following types of stock funds invest in stock traded within one specific region of the world?

Regional funds

Which of the following is not a way one can access reliable information about mutual funds on the internet?

Review blogs from amateur investors about their favorite mutual funds.

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 correct for a closed-end fund?

The price of its shares is determined by supply and demand, by the value of stocks int he portfolio, and by investor expectations.

melinda wants to withdraw some money from her mutual fund. she has a minimum asset value of $10,000. Which of the following is not an option available for her to systematically withdraw some money?

Withdraw all principal and leave interest dividends and capital gain distributions in the account.

if you hold mutual fund shares in your ROTH IRA, the taxes on reinvested income will be

eliminated

Earnings paid to shareholders that are not related to the sale of securities in the fund's portfolio are called

income dividends