Question 1

Which of the following statements is false?

Accepted Answer

A)   Most investors in mutual funds will tell you that the most important consideration in evaluating a mutual fund is long-term performance.
B)   It is possible to compare a fund's long-term performance with the performance of the TSE 300 stock index.
C)   The length of time a fund's manager has been managing a fund should not be considered when evaluating a fund because the investment company has the right to replace a fund manager.
D)   Long-term performance should not be the only factor that you consider in evaluating a mutual fund.
E)   Information on a fund's long-term performance is available in its prospectus and in other sources of financial information.F) A) and B)
G) C) and D)

Question 2

All mutual funds charge a management expense ratio (MER).

Accepted Answer

A) True 
 B)False  True

Question 3

In a newspaper quotation,which of the following letters would indicate if a mutual fund has a redemption charge?

Accepted Answer

A)   N
B)   R
C)   FR
D)   B
E)   Z.F) A) and D)
G) B) and E)

Question 4

For a load fund,the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

Accepted Answer

A) True 
 B)False

Question 5

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Accepted Answer

A)   closed-end
B)   open-end
C)   load
D)   no-load
E)   convertible fund.F) C) and E)
G) A) and B)

Question 6

Which of the following is not a withdrawal option for a mutual fund?

Accepted Answer

A)   The investor may withdraw a specified,dollar amount each investment period.
B)   The investor may liquidate or "sell off" a certain number of shares each investment period.
C)   The investor can withdraw a fixed percentage of asset growth.
D)   The investor can withdraw all income that results from interest,dividends,and capital gains earned by the mutual fund during an investment period.
E)   The investor must wait five years,and then can withdraw 10 percent of the asset growth each year until the fund is exhausted.F) A) and E)
G) All of the above

Question 7

In a newspaper quotation,which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

Accepted Answer

A)   N
B)   R
C)   FR
D)   B
E)   It is impossible to tell if there is a front-end and a back-end fee by looking in the newspaper.F) C) and D)
G) A) and C)

Question 8

Which of the following statements is false?

Accepted Answer

A)   Investors purchase mutual funds for diversification.
B)   Investors purchase mutual funds because of professional management.
C)   Investors who purchase mutual funds are guaranteed a higher rate of return than a comparable investment in stocks or bonds.
D)   Professional mutual fund managers work for an investment company.
E)   Even the best portfolio managers sometimes make mistakes.F) All of the above
G) B) and C)

Question 9

For a mutual fund,the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

Accepted Answer

A) True 
 B)False

Question 10

In a newspaper quotation,NAV stands for "not accessible value."

Accepted Answer

A) True 
 B)False

Question 11

In a newspaper quotation,which of the following letters would indicate if a mutual fund is a no load fund?

Accepted Answer

A)   N
B)   R
C)   FR
D)   B
E)   It is impossible to tell if a mutual fund is a no load fund by looking in the newspaper.F) A) and B)
G) None of the above

Question 12

Why do investors purchase mutual funds instead of purchasing stocks,bonds,or other investments on their own?

Accepted Answer

The major reasons why investors purchase mutual funds are professional management and diversification.Most investment companies do everything possible to convince individual investors that they can do a better job of picking securities than individuals can.In reality,they do have professional portfolio managers with years of experience that spend a lot of time picking just the right securities for their mutual funds.Of course,it should be pointed out that even the best managers sometimes make mistakes.The diversification of mutual funds spells safety; because an occasional loss incurred with one investment is usually offset by gains from other investments.

Question 13

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

Accepted Answer

To purchase shares in an open-end mutual...

Question 14

Most Canadian mutual funds sponsored by the Canadian chartered banks _________________________________

Accepted Answer

A)   charge an annual management expense ratio (MER) 
B)   are no-load funds
C)   Both (a) and (b) .
D)   Neither (a) nor (b) .
E)   Both (a) ,(b) and (c) F) A) and B)
G) B) and C)

Question 15

While mutual fund income dividends are subject to taxation,capital gain distributions are not subject to taxation.

Accepted Answer

A) True 
 B)False  False

Question 16

Which of these is not a true statement?

Accepted Answer

A)   ETFs can be purchased through a broker.
B)   ETFs can be purchased on margin.
C)   ETFs can be sold short.
D)   ETFs have lower management expenses than conventional mutual funds.
E)   ETFs can be purchased through a broker,on margin,sold short,and have lower management expenses than conventional mutual funds.F) D) and E)
G) C) and D)

Question 17

For many individuals,mutual funds are not a good choice.

Accepted Answer

A) True 
 B)False

Question 18

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:

Accepted Answer

A)   net asset value.
B)   outstanding balance.
C)   per share value.
D)   book value.
E)   accounting value.F) A) and D)
G) A) and C)

Question 19

The Capitalist Mutual Fund's portfolio is valued at $55 million.The fund has liabilities of $4 million,and the investment company sponsoring the fund has issued 2,400,000 shares.What is the fund's net asset value?

Accepted Answer

A)   $100
B)   $21.25
C)   $22.91
D)   $24.58
E)   $1F) A) and B)
G) A) and C)

Question 20

When one investment company manages a group of mutual funds,it is called a(n) :

Accepted Answer

A)   exchange fund.
B)   family of funds.
C)   diversification fund.
D)   versatility fund.
E)   group of funds.F) A) and E)
G) All of the above

Exam 13: Investing in Mutual Funds

Which of the following statements is false?

Correct Answer
verified

All mutual funds charge a management expense ratio (MER).

Correct Answer
verified
True

In a newspaper quotation,which of the following letters would indicate if a mutual fund has a redemption charge?

Correct Answer
verified

For a load fund,the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

Correct Answer
verified

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Correct Answer
verified

Which of the following is not a withdrawal option for a mutual fund?

Correct Answer
verified

In a newspaper quotation,which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

Correct Answer
verified

Which of the following statements is false?

Correct Answer
verified

For a mutual fund,the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

Correct Answer
verified

In a newspaper quotation,NAV stands for "not accessible value."

Correct Answer
verified

In a newspaper quotation,which of the following letters would indicate if a mutual fund is a no load fund?

Correct Answer
verified

Why do investors purchase mutual funds instead of purchasing stocks,bonds,or other investments on their own?

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

Correct Answer
verified
To purchase shares in an open-end mutual...
View Answer

Most Canadian mutual funds sponsored by the Canadian chartered banks _________________________________

Correct Answer
verified

While mutual fund income dividends are subject to taxation,capital gain distributions are not subject to taxation.

Correct Answer
verified
False

Which of these is not a true statement?

Correct Answer
verified

For many individuals,mutual funds are not a good choice.

Correct Answer
verified

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:

Correct Answer
verified

The Capitalist Mutual Fund's portfolio is valued at $55 million.The fund has liabilities of $4 million,and the investment company sponsoring the fund has issued 2,400,000 shares.What is the fund's net asset value?

Correct Answer
verified

When one investment company manages a group of mutual funds,it is called a(n) :

Correct Answer
verified

Exam 13: Investing in Mutual Funds

Which of the following statements is false?

Correct AnswerverifiedShow Answer

All mutual funds charge a management expense ratio (MER).

Correct AnswerverifiedTrue

In a newspaper quotation,which of the following letters would indicate if a mutual fund has a redemption charge?

Correct AnswerverifiedShow Answer

For a load fund,the average commission usually ranges between 1 and 3 percent of the purchase price for investments under $10,000.

Correct AnswerverifiedShow Answer

A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____________ fund.

Correct AnswerverifiedShow Answer

Which of the following is not a withdrawal option for a mutual fund?

Correct AnswerverifiedShow Answer

In a newspaper quotation,which of the following letters would indicate if a mutual fund has a front-end and a back-end fee?

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

For a mutual fund,the typical yearly management fee ranges from 2.5 to 5 percent of total dollar amount invested.

Correct AnswerverifiedShow Answer

In a newspaper quotation,NAV stands for "not accessible value."

Correct AnswerverifiedShow Answer

In a newspaper quotation,which of the following letters would indicate if a mutual fund is a no load fund?

Correct AnswerverifiedShow Answer

Why do investors purchase mutual funds instead of purchasing stocks,bonds,or other investments on their own?

Describe either the purchase options or withdrawal options that can be used to invest in or withdraw money from the investment company that sponsors an open-end mutual fund.

Correct AnswerverifiedTo purchase shares in an open-end mutual...View AnswerShow Answer

Most Canadian mutual funds sponsored by the Canadian chartered banks _________________________________

Correct AnswerverifiedShow Answer

While mutual fund income dividends are subject to taxation,capital gain distributions are not subject to taxation.

Correct AnswerverifiedFalse

Which of these is not a true statement?

Correct AnswerverifiedShow Answer

For many individuals,mutual funds are not a good choice.

Correct AnswerverifiedShow Answer

The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:

Correct AnswerverifiedShow Answer

The Capitalist Mutual Fund's portfolio is valued at $55 million.The fund has liabilities of $4 million,and the investment company sponsoring the fund has issued 2,400,000 shares.What is the fund's net asset value?

Correct AnswerverifiedShow Answer

When one investment company manages a group of mutual funds,it is called a(n) :

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
To purchase shares in an open-end mutual...
View Answer

Correct Answer
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Correct Answer
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False

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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