Business Finance

Anonymous
timer Asked: Mar 6th, 2016

Question description

When picking a mutual fund, you should choose a fund with a front or back-end load in order to reduce costs.

True

False



While not all mutual funds have loads or commissions, they all have management fees and expenses that are charged to the mutual fund shareholders.

True

False



The ________ is the market value of the securities that a mutual fund has in its portfolio.

book value

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?

$10.50

$11.00

$12.00

$12.50


Passively managed index mutual funds tend to have lower expenses than actively managed mutual funds.

True

False


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.

Internet

Stock

Index

International



Mutual funds that receive dividends and capital gains must distribute these to investors in the same year.

True

False



Even bond mutual funds with little or no default risk have an interest rate risk.

True

False




Treasury bond funds with short maturities have ________ default risk and ________ interest rate risk.

high; low

high; high

limited; high

low; limited




Funds that performed well in one period of time will not necessarily perform well in the future.

True

False



Because a mutual fund is already diversified with perhaps 100 or more different investments, further diversification is not recommended or necessary.

True

False



Which of the following should be taken into consideration when assessing the quality of a fund's manager?

A.

Management tenure

B.

Management Experience

C.

The manager's adherence to the fund's investment strategy

D.

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.

True

False



Most exchange-traded funds (ETFs) are actively managed.

True

False


 


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