Packaged Products Overview Review Questions
An open end fund has a Net Asset Value of $10 per share. The minimum price at which a share can be purchased is: A: $10 B: $10 plus a commission C: $10 plus a mark-up D: any price because this is negotiated in the market
A: $10 -purchaser pays the next computed Net Asset Value plus a sales charge if the fund imposes a "sales load." For a "no load" fund, the customer would simply pay Net Asset Value - this is the minimum price for an open-end fund
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: Negotiable with a one-time stock issuance
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: Net Asset Value
Which of the following MUST be a closed end fund? A: Net Asset Value= $10 / Purchase Price = $9.50 B: Net Asset Value = $10 / Purchase Price = $10 C: Net Asset Value = $10 / Purchase Price = $10.50 D: The fund is issued and redeemed at end-of-day
A: Net Asset Value= $10 / Purchase Price = $9.50
The principal difference between an open end management company and a closed end management company is: A: capitalization B: management C: investment objective D: expense ratio
A: capitalization
The term "mutual fund" is the common name for a(n): A: open end management company B: closed end management company C: fixed unit investment trust D: participating unit investment trust
A: open end management company
Which of the following is a redeemable security? A: Corporate debenture B: Closed-end fund C: Open-end fund D: Ginnie-Mae pass through certificates
C: Open-end fund
Assets - Liabilities for a mutual fund equals: A: Net Worth B: Net Asset Value C: Net Operating Margin D: Net Investment Income
B: Net Asset Value
Which statement is TRUE when comparing types of management companies? A: Open-end funds are publicly traded funds B: Open-end funds are mutual funds C: Closed-end funds have no management D:Closed-end funds are not publicly traded funds since these are closed to the general public
B: Open-end funds are mutual funds -open-end management company is a mutual fund. Mutual funds (open-end funds) are "open" to new investment. Shares are issued and redeemed at the end of the day and do not "trade."
A closed-end management company is a: A: mutual fund B: publicly traded fund C: fixed unit investment trust D: participating unit investment trust
B: publicly traded fund
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: Oil and Gas Leasehold Partnership
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: New issues of stock
C: Closed End Funds trading on the NYSE
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: Participating unit investment trusts
C: Closed end fund shares -listed and traded on exchange
Which terms apply to fixed unit investment trusts? A: Managed and regulated B: Managed and unregulated C: Unmanaged and regulated D: Unmanaged and unregulated
C: Unmanaged and regulated -portfolio is fixed, not managed -regulated under investment company act of 1940
The essential difference between an open end fund and closed end fund is that a(n): A: open-end fund is managed; while a closed-end fund is not managed B: closed-end fund is managed; while an open-end fund is not managed C: open-end fund has a different capital structure than a closed-end fund D: open-end fund computes Net Asset Value daily; while a closed-end fund does not
C: open-end fund has a different capital structure than a closed-end fund
All of the following terms apply to publicly traded fund shares EXCEPT: A: one-time issuance B: managed C: redeemable D: negotiable
C: redeemable
The minimum price at which a closed 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
D: Market Price plus a commission
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: Redeemable with continuous stock issuance
A variable annuity is a: A: face amount certificate company B: management company C: fixed unit investment trust D: participating unit investment trust
D: participating unit investment trust
