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Exam 4: Mutual Funds and Other Investment Companies

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Question 31

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The two principal types of REITs are equity trusts, which ________, and mortgage trusts, which ________.

A) invest directly in real estate; invest in mortgage and construction loans
B) invest in mortgage and construction loans; invest directly in real estate
C) use extensive leverage; distribute less than 95% of income to shareholders
D) distribute less than 95% of income to shareholders; use extensive leverage

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Question 32

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Mutual funds account for roughly ________ of investment company assets.

A) 30%
B) 50%
C) 70%
D) 90%

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Question 33

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Harold has just taken his company public and owns a large quantity of restricted stock. For purposes of diversification, what fund might he help create in order to diversify his holdings?

Mutual fund returns may be granted pass-through status if ________.

A contingent deferred sales load is commonly called a ________.

The greatest percentage of mutual fund assets are invested in ________.

Most real estate investment trusts (REITs) have a debt ratio of around ________.

If you place an order to buy or sell a share of a mutual fund during the trading day, the order will be executed at ________.

You invest in a mutual fund that charges a 3% front-end load, 1% total annual fees, and a 2% back-end load, which decreases .5% per year. How much will you pay in fees on a $10,000 investment that does not grow if you cash out after 3 years of no gain?

Which one of the following invests in a portfolio that is fixed for the life of the fund?

________ is an example of an exchange-traded fund.

The difference between balanced funds and asset allocation funds is that ________.

Which of the following result in a taxable event for investors? I. Short-term capital gain distributions from the fund II. Dividend distributions from the fund III. Long-term capital gain distributions from the fund

Revenue sharing with respect to mutual funds refers to ________.

Specialized-sector funds concentrate their investments in ________.

Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million shares at the start of the year and with $500 million in assets, 40 million in debt, and 18 million shares at the end of the year. During the year investors have received income distributions of $.50 per share and capital gain distributions of $.30 per share. If the total expense ratio is .75%, what is the rate of return on the fund?

As of 2017, approximately ________ of mutual fund assets were invested in money market funds.

The top Morningstar mutual fund performance rating is ________.

Which of the following typically employ significant amounts of leverage? I. Hedge funds II. REITs III. Money market funds IV. Equity mutual funds

Which of the following funds is most likely to have a debt ratio of 70% or higher?