chp 13 – Flashcard
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the author recommends small investors should stick to . . .
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no-loads funds
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Redeeming your mutual fund shares might result in a charge called a . . .
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back-end loan
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an annual fee charged by some mutual funds to cover marketing and distribution expenses is the . . .
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12(b)-1 fee
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index funds have provided competitive rate of return because . . .
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their cost are lower than other stock funds, it is difficult to out perform the market, they have very low turnover rates, and they are tax efficient.
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T/F: the most important advantage of a mutual fund is pooled diversification.
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True
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T/F: the price investor can sell his shares of an open-end mutual fund share is the net asset value.
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True
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T/F: socially responsible funds have experienced lower return than other types of funds of similar risk.
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True
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T/F: the major benefit to small investors of mutual funds is diversification.
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True
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T/F: for most investors, the best way to deal in foreign securities is through an international mutual fund.
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True
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T/F: by definition, all ETF are no-load funds.
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True
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a mutual fund allows investors to . . .
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become owners of a widely diversified portfolio of securities.
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T/F: open-ended mutual funds are guaranteed, they can not lose value.
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False
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T/F: spiders and diamonds are examples of ETF's.
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True
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T/F: a funds objective must be stated in its prospectus.
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True
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T/F: The price per share of a closed-end investment fund could be lower than its NAV.
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True
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T/F: Mutual funds can be classified by the types of securities they purchase.
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True
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which of the following bond mutual funds would provide tax-free income? a) government bond fund b) mortgage-municipal bond-fund c) convertible bond fund d) mortgage-backed bond fund e) all of the above
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mortgage-municipal bond-fund
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a _____ is a type of investment that is required by law to pay out nearly all earnings to owners.
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real estate investment trust
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another name for a mutual fund is . . .
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an opetment companyn-end inves
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investors tend to use mutual-funds for which of the following reasons? a) diversification b) professional management c) financial returns d) convenience e) all of the above
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e) all of the above
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investment company earnings come from . . .
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interest, dividends, and capital gains.
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Having money taken automatically from your paycheck and put into a mutual fund is and example of . . .
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an automatic investment plan
