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Exam 13: Investing in Mutual Funds

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Question 21

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Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Value funds look for stocks with relatively [high | low] dividend yields.

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Question 22

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Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -You [could | could not] learn in a newspaper whether your fund charged a redemption fee.

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Question 23

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Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Individuals would not trade among themselves in [a closed-end | an open-end] investment company.

Investors tend to use mutual funds for which of the following reasons?

Growth-and-Income funds invest most of their capital in common stocks.

As of late 2014,housing prices had rebounded from the levels of the housing debacle of 2007-2009.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -[Open-end | Closed-end] mutual funds always redeem shares at NAV.

When you buy shares in a no-load fund,you will pay the NAV.

A fund that invests only in a particular industry would be a _____ fund.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -A quotation for a mutual fund shows a NAV of $9.60 and an offer price of $10.00.With an investment of $1,000,you could buy [104.17 | 100] shares.

Equity-income funds emphasize capital appreciation in their investment goals.

Open-ended mutual funds companies buy their shares back from investors at NAV.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -The actual ownership of a mutual fund is in the hands of the [management company | shareholders].

In the Wall Street Journal's listing of mutual funds,a "t" after the mutual fund name and before the NAV means that the particular mutual fund has a _____ associated with it.

RACE Mutual fund is a no-load fund that had a net asset value one year ago of $25.60.Today the NAV is $28.83.During the year,dividends of $0.72 were paid out and a capital gains distribution of $0.65 was made.Calculate the approximate yield for RACE.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Exchange traded funds are investment company shares that trade [at day's close | throughout the day] on stock exchanges.

Investment company earnings come from:

Low-load funds do not charge a commission upon initial purchase.

Socially responsible funds abstain from investing in alcohol,gambling,or tobacco stocks.

Advantages of exchange traded funds over mutual funds include a broader market focus.