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Exam 13: Investing in Mutual Funds

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Question 71

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

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Question 72

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A technology fund is an example of a sector fund.

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Question 73

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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. -If you choose to have your mutual fund dividends automatically reinvested,you [may defer taxes on the dividends until you redeem some shares | still owe taxes for the year the dividends were earned].

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 primary investment objective of bond mutual funds is [growth | income].

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

A hybrid REIT would invest only in real estate mortgages.

____ would not be a reason for purchasing mutual funds.

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-indexed funds are [actively | passively] managed pools of investments.

Advantages of exchange traded funds over mutual funds include all of the following except

All no load funds charge an upfront fee to purchase shares of a mutual fund.

The major benefit to small investors of mutual funds is diversification.

A(n) ____ fund is quite speculative.

Socially Responsible Funds typically avoid investing in

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.

A 12(b)-1 fee can only be charged by a load mutual fund.

The most important advantage of a mutual fund is pooled diversification.

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. -Mutual funds must value their securities [monthly | daily].

The fund whose main objective is growth is known as a(n) ____ fund.

Asset allocation funds invest in stocks,bonds,and cash.

A mutual fund with an objective of both growth and income is a(n)