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Exam 13: Investing in Mutual Funds

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Question 21

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The current market value of all the securities a mutual fund owns is called the

A) market value.
B) par value.
C) net asset value.
D) book value.
E) liquidation value.

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Question 22

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The approximate yield on a mutual fund depends only on the fund's dividend income and capital gains distributions.

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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. -A mutual fund cannot charge more than [?6.5 | ?8.5] percent in total sales charges and fees.

In The Wall Street Journal's listing of mutual funds,an "r" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

An open-end investment company is commonly known as a mutual 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. -[?Equity | ?Mortgage] REITs own income-producing real estate.

Redeeming your mutual fund shares might result in a charge called

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 market value of your mutual fund shares will move in the [same | opposite] direction as the market value of the underlying securities.

Both load and no-load funds will always charge a

Value funds look for stocks with relatively all the following except

A mutual fund's NAV is its

Future fund performance is the real key to investment success with mutual funds.One important element to examine when attempting to predict a fund's future performance is the

A mutual fund's price per share will increase if its underlying holdings increase in value.

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. -Growth funds [?do | ?do not] involve a fair amount of risk.

Open-ended mutual funds can be traded on an intraday basis.

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 are comprised of stocks with [low | high] P/E ratios.

Sector funds concentrate their holdings in specific targeted markets.

The net asset value (NAV)per share is found by dividing the market value of the fund's securities less the fund's liabilities by the number of shares outstanding.

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. -Real estate typically exhibits [?less | ??more] volatility than stocks.