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Exchange-traded funds are like mutual funds in that they are often structured as an open-end investment company,but they also resemble stock as they are traded throughout the day on a stock exchange.

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What is the difference between dollar cost averaging and continuous automatic investing?


A) Continuous automatic investing doesn't have any stated lump sum or end date.
B) Dollar cost averaging is when you have a large amount of money to invest,and you invest specific portions of the lump sum at specific times until the entire sum is invested.
C) Both options are correct.
D) Neither option is correct.

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Net asset value is calculated by the total value of all the assets the ________.


A) fund holds
B) fund holds for the historical average for one year,divided by the number of mutual fund shares outstanding
C) fund holds,divided by the number of mutual fund shareholders
D) fund holds,divided by the number of mutual fund shares outstanding

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What are the two main fees associated with a mutual fund?


A) Open- and closed-end fees
B) Front and end load fees
C) Expense ratios and loads
D) Transaction fees and taxes

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________ investing describes an investment strategy which seeks to maximize both financial return and social good.


A) Socially responsible
B) Environmental stewardship
C) Consumer protection
D) Human rights

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Which is unlikely to be included in mutual fund fees?


A) Front load
B) Back-end load
C) No load
D) Front and back-end load

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________ is a market-performance measurement index.Derived from the stock of 500 large companies on the U.S.market,it is designed to be a leading indicator of U.S.equities and is intended to reflect the risk/return characteristics of the large-cap companies.


A) Standard & Poor's 500
B) Standard & Poor's 2000
C) Russell 500
D) Russell 2000

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________ is a market-performance measurement index.Derived from the stock of the 2,000 smallest companies on the U.S.market.


A) Standard & Poor's 500
B) Standard & Poor's 2000
C) Russell 500
D) Russell 2000

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Which of the following are among the fund manager's responsibilities?


A) Buy and sell assets
B) Maximize the growth of the fund given the specific investment objective
C) Minimize the losses of the fund
D) All options are correct.

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An advantage of buying mutual funds from a full-service broker or financial planner is ________.


A) no fees or commissions
B) professional advice and help in making your investment decisions
C) knowing that all full-service brokers and financial planners do everything in the best interests of their customers
D) knowing that your returns are guaranteed

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Closed-end mutual funds ________.


A) allow investors to add new money at any time
B) have a fixed number of shares and trade based upon supply and demand
C) are priced based on the return of a one-year Treasury bill
D) have no commission

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All mutual funds have an expense ratio; however,there are no-load funds as well as funds with loads.

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All mutual funds have an expense ratio which they use to assess operating expenses to the owners of the mutual fund.

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No-load funds often outperform load funds--especially when you consider that 100% of the investment is working for you.

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When are mutual fund purchases and sale orders executed?


A) At the beginning of each business day
B) At the end of the business day
C) Upon receipt
D) Within 10 business days

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Mutual funds are first categorized into ________ funds.


A) open and closed
B) load and no-load
C) profitable and unprofitable
D) mutual and exclusive

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The ________ is the individual holding shares in the mutual fund on the day the fund distributes dividends and capital gains.


A) owner
B) fund manager
C) person of record
D) share owner

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________ are share classes that are level-load shares and generally do not have a front-end load.


A) Class A
B) Class B
C) Class C
D) Class D

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Secondarily,mutual funds are categorized into ________ funds.


A) open and closed
B) load and no-load
C) profitable and unprofitable
D) mutual and exclusive

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There are two kinds of prospectuses: (1)the statutory prospectus and (2)the summary prospectus; however,the summary version does not include information on the fund's investment objectives,its strategies for achieving the objectives,the principal risks of investing in the fund,the fund's fees and expenses,and its past performance.

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