When picking a mutual fund, you should choose a fund with a front or back-end load in order to reduce costs.
While not all mutual funds have loads or commissions, they all have management fees and expenses that are charged to the mutual fund shareholders.
The ________ is the market value of the securities that a mutual fund has in its portfolio.
net asset value
gross asset value
net worth value
Which of the following is not a true statement about mutual funds?
All have a minimum investment required.
All have the same investment goals.
The calculation of net asset value is the same.
All have a management expense ratio.
A mutual fund has a beginning balance of $100 million, earns interest of $10 million, receives dividends of $15 million, and has expenses of $5 million. If 10 million shares are outstanding, what is the NAV?
Passively managed index mutual funds tend to have lower expenses than actively managed mutual funds.
Which of the following funds would probably have the lowest risk and return?
Large cap stock fund
Small cap stock fund
Government bond fund
Low quality (high yield or junk) bond fund
________ funds are mutual funds that attempt to mirror the movements of existing broad market indicators.
Mutual funds that receive dividends and capital gains must distribute these to investors in the same year.
Even bond mutual funds with little or no default risk have an interest rate risk.
Treasury bond funds with short maturities have ________ default risk and ________ interest rate risk.
Funds that performed well in one period of time will not necessarily perform well in the future.
Because a mutual fund is already diversified with perhaps 100 or more different investments, further diversification is not recommended or necessary.
Which of the following should be taken into consideration when assessing the quality of a fund's manager?
The manager's adherence to the fund's investment strategy
All of the above
Mutual funds trade throughout the day like stocks, whereas exchange-traded funds (ETFs) trade only once at the end of the day.
Most exchange-traded funds (ETFs) are actively managed.