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Question 11 Advantages of mutual funds include professional management. all of t

ID: 2654650 • Letter: Q

Question

Question 11

Advantages of mutual funds include

professional management.

all of these.

liquidity.

diversification.

Question 12

Which of the following types of investment companies operates much like an index fund?

exchange-traded fund

unit investment trust

closed-end fund

REIT

Question 13

A common stock fund that invests in only one industry is called a(n) ____ fund.

maximum capital gains

growth and income

index

sector

Question 14

Mutual funds that charge a load do so to compensate

fund managers.

brokers.

shareholders.

the SEC.

Question 15

Your first task in selecting a mutual fund is to

review your investment policy.

locate sources of comparative performance data.

eliminate funds inappropriate for your investment goals.

screen and compare funds that meet your investment criteria.

Question 16

Taxes on annual earnings from mutual funds can be avoided

while those amounts are kept in an IRS-qualified retirement account.

as long as the mutual shares are not sold.

while those amounts are kept in an IRS-qualified retirement account and if those earnings are interest from municipal bonds.

if those earnings are interest from municipal bonds.

Question 17

Mutual funds permit automatic income reinvestment of

ordinary income dividend distribution.

none of these.

both ordinary income dividend distributions and capital gains distributions.

capital gains distribution.

Question 18

The type of mutual fund that is not actively managed is called a(n) ____ fund.

emerging market

money market

index

sector

Question 19

A mutual fund that does not assess a sales charge at the time of the investment purchase is called a ____ fund.

back-end load

front-end load

low-load

no-load

Question 20

Open-end mutual funds

make up about 75 percent of all mutual funds.

are sold only through brokers.

are sold at their current net asset value.

are sold to other investors on a secondary market.

A.

professional management.

B.

all of these.

C.

liquidity.

D.

diversification.

Explanation / Answer

Answer to Q. No.11

Advantage of Mutual Fund Include :

b. all of these

Answer to Q. no. 12

Which of the following type of investment companies operate much like an index fund

a. Exhange Traded Fund

Answer to Q. No. 13

A common stock fund that invests only in one Industry is called a(n)'

C. Index Fund

Answer to Q. No. 14

Mutual funds that charge a load do so to compensate

A. broker

Answer to Q. No. 15

Your first task in selecting a mutual fund is to

A.review your investment policy

Answer to Q. No. 16

Taxes on annual earnings from mutual funds can be avoided

C. while those amounts are kept in an IRS-qualified retirement account and if those earnings are interest from municipal bonds

Answer to Q. No. 17

Mutual funds permit automatic income reinvestment of

C. both ordinary income dividend distributions and capital gains distributions.

Answer to Q. No. 18

The type of mutual fund that is not actively managed is called a(n)

C. Index

Answer to Q. No. 19

A mutual fund that does not assess a sales charge at the time of the investment purchase is called

B. back end load fund

Answer to Q. No. 20

Open-end mutual funds

C. are sold at their current net asset value

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