Lesson 12 Personal Finance

One of the possible advantages of investing in a real estate partnership is that you

gain entry to a shopping center or large building by investing as little as $5,000.

A mutual fund that invests in common stocks of well-managed, rapidly growing corporations is called a(n) _______ fund.

growth

REITs, Ginnie Maes, and Freddie Macs are examples of _______ real estate investments

indirect

Which one of the following investments in real estate does not provide diversification?

land

One of the advantages of being a limited partner in a real estate investment venture is that you have _______ liability

limited financial

A mutual fund in which investors pay a commission every time they purchase shares is called a(n) _______ fund

load

A mutual fund that invests in short-term corporate obligations and government securities that offer high interest is called a(n) _______ fund.

money market

Which type of REIT pools money to finance construction loans?

mortgage

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the

net asset value

A mutual fund in which new shares are issued and redeemed by the investment company at the request of investors is called a(n) _______ fund.

open end

If you want risk-proof real estate investments, invest in

participation certificates (PCs)

An investment company sponsoring a mutual fund must give potential investors a

prospectus

Which one of the following real-estate investments provides some diversification?

real estate investment trust (REITs)

perhaps the largest drawback of direct real estate investments is

the absence of large and liquid markets for them.

Financial leverage refers to

the use of borrowed funds for investment purposes

Mary Cooper just purchased 100 shares in the All-American Fidelity Fund. The purchase cost for each share was $20. If this fund charges a 5 percent load, what is the total amount she will pay the investment company?

$2,100

The Capitalist Mutual Fund's portfolio is valued at $45 million. The fund has liabilities of $3 million, and the investment company sponsoring the fund has issued 1,600,000 shares. What is the fund's net asset value?

$26.25

The management fee for most mutual funds ranges between

0.25 to 2 percent

The typical marketing and distribution fees that a mutual fund passes on to a shareholder approximately average

1 percent or less of the fund's assets on an annual basis

In a newspaper quotation, which of the following letters would indicate if a mutual fund is a no load fund?

NL

A mutual fund that invests in common stocks, preferred stocks, and bonds is called a(n) _______ fund

balanced

During 1995, Lincoln Masters received income dividends of $850 and capital gain distributions of $540. Based on this information

both amounts must be included as taxable income.

For most mutual funds, the net asset value is calculated

daily

Which type of REIT invests directly in properties?

equity