For each of the following statements, indicate whether the statement applies to
ID: 2722952 • Letter: F
Question
For each of the following statements, indicate whether the statement applies to an open-end mutual fund, a closed-end mutual fund, both, or neither.
Statement
Answer
Allows an individual investor to effectively own hundreds of different stocks or bonds with a relatively small investment.
An investor who wants to acquire shares must buy them from another investor on the open market.
Buy and sell orders are filled only at the end of the trading day, not during the trading day.
Consistently perform better than the market as measured by a benchmark.
Purchasing shares in the fund gives you partial ownership in a portfolio of securities.
The purchase price of the fund is the fund’s net asset value.
The purchase price of the fund may be at a premium or discount to the net asset value.
When an investor sends cash to the fund, new shares are created by the fund for that investor.
When buying shares through a broker, you pay a standard commission just as you would with a stock.
When purchasing shares in the fund, you may pay a substantial commission called a load.
Statement
Answer
Allows an individual investor to effectively own hundreds of different stocks or bonds with a relatively small investment.
An investor who wants to acquire shares must buy them from another investor on the open market.
Buy and sell orders are filled only at the end of the trading day, not during the trading day.
Consistently perform better than the market as measured by a benchmark.
Purchasing shares in the fund gives you partial ownership in a portfolio of securities.
The purchase price of the fund is the fund’s net asset value.
The purchase price of the fund may be at a premium or discount to the net asset value.
When an investor sends cash to the fund, new shares are created by the fund for that investor.
When buying shares through a broker, you pay a standard commission just as you would with a stock.
When purchasing shares in the fund, you may pay a substantial commission called a load.
Explanation / Answer
Statement Answer Allows an individual investor to effectively own hundreds of different stocks or bonds with a relatively small investment. Both - It doesn't matter whether it’s a close ended or open ended scheme An investor who wants to acquire shares must buy them from another investor on the open market. Niether - In mutual funds, one does not buy shares Buy and sell orders are filled only at the end of the trading day, not during the trading day. Open Ended Scheme Consistently perform better than the market as measured by a benchmark. Niether - as they subject to market risk Purchasing shares in the fund gives you partial ownership in a portfolio of securities. Both - It doesn't matter whether it’s a close ended or open ended scheme The purchase price of the fund is the fund’s net asset value. Open Ended Scheme The purchase price of the fund may be at a premium or discount to the net asset value. Close Ended Scheme When an investor sends cash to the fund, new shares are created by the fund for that investor. Both - It doesn't matter whether it’s a close ended or open ended scheme When buying shares through a broker, you pay a standard commission just as you would with a stock. Niether - it is related to shares When purchasing shares in the fund, you may pay a substantial commission called a load. Close Ended Scheme
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