Which one of the adhering to invests in a portfolio that is fixed for the life of the fund?

A.shared fund

B.money sector fund

C.regulated investment company

D.unit investment trust

______ are partnerships of investors through portfolios that are larger than a lot of individual investors but are still also small to warrant managing on a sepaprice basis.

You are watching: The type of mutual fund that primarily engages in market timing is called _______.

A.Commingled funds

B.Closed-finish funds


D.Mutual funds

A __________ is a exclusive investment pool open just to well-off or institutional investors that is exempt from SEC regulation and also deserve to therefore pursue more speculative plans than shared funds.

A.commingled pool

B.unit trust

C.hedge fund

D.money industry fund

Advantperiods of investment companies to investors include all yet which among the following?

A. document keeping and also administrationB. low-cost diversificationC. professional administration D. guaranteed prices of return

5. Which of the complying with commonly employ significant amounts of leverage? I. Hedge funds II. REITs III. Money industry funds IV. Equity mutual funds

A.I and II only

B.II and III only

C.III and IV only

D.I, II, and also III only

The NAV of which funds is addressed at $1 per share?

A. equity fundsB. money sector fundsC. fixed-income fundsD. commingled funds

The two primary types of REITs are equity trusts, which _______________, and also mortgage trusts, which _______________.

A.invest directly in actual estate; invest in mortgage and construction loans

B.invest in mortgage and also building loans; invest directly in real estate

C.use considerable leverage; distribute less than 95% of inconcerned shareholders

D.distribute less than 95% of inconcerned shareholders; use extensive leverage

A contingent deferred sales load is generally referred to as a ____.

A.front-finish load

B.back-finish loadC. 12b-1 chargeD. top-finish sales commission

In the USA in 2014, tbelow were approximately _______ common funds available by fewer than _______ fund complexes.

12,000; 600

7,000; 100

8,000; 800

9,000; 300

10. Part B of a shared fund prospectus consists of information about:

I. Fund holdings by directors and officers

II. Front-end and back-end loads

Securities organized by the fund at the end of the fiscal year

I only

I and II only

I and III only

I, II, and III

11. Mutual funds provide the complying with for their shareholders.

A. diversificationB. skilled managementC. record keeping and administrationD. all of these options

12. The average maturity of fund investments in a money market shared fund is _______.

slightly more than 1 month

slightly more than 1 year

about 9 months

between 2 and 3 years

13. Rank the adhering to fund categories from many riskies to least risky:

I. Equity development fund

II. Balanced fund

III. Sector fund

IV. Money market fund





14. Which of the following lead to a taxable occasion for investors?

I. Short-term capital gain distributions from the fund

II. Dividend distributions from the fund

Long-term capital gain distributions from the fund

I only

II only

I and II only

I, II, and III

15. The form of common fund that generally engperiods in industry timing is called _______.

a sector fund

an index fund

an ETF

an ascollection alarea fund

16. As of 2014, around _____ of mutual money assets were invested in equity funds.





17. As of 2014, about _____ of mutual fund assets were invested in bond funds.





18. As of 2014, approximately _____ of shared fund assets were invested in money market funds.




19. Management fees for open-finish and also closed-finish funds commonly selection in between _____ and also _____.

A. .2%; 1.5%

B. .5%; 5%

2%; 5%

3%; 8%

20. The primary measurement unit provided for assessing the worth of one"s stake in an investment firm is ___________________.

net asset value

average ascollection value

gross ascollection value

21. Net ascollection value is defined as ________________________.

book value of assets split by shares outstanding

book worth of assets minus liabilities split by shares outstanding

sector value of assets split by shares outstanding

sector worth of assets minus liabilities separated by shares outstanding

Assume that you have actually just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares impressive. What is the net ascollection worth (NAV) of these shares?




Assume that you have actually freshly purchased 100 shares in an investment agency. Upon researching the balance sheet, you note that the firm is reporting $225 million in assets, $30 million in liabilities, and 10 million shares outstanding. What is the net asset worth (NAV) of these shares?



$19.50D. $1.95

24. The Vanguard 500 Index Fund tracks the performance of the S&P 500. To carry out so, the fund buys shares in each S&P 500 company __________.

A. in proportion to the market worth weight of the firm"s equity in the S&P 500B. in propercentage to the price weight of the stock in the S&P 500C. by purchasing an equal variety of shares of each stock in the S&P 500D. by purchasing an equal dollar amount of shares of each stock in the S&P 500

25. Which of the following is not a form of regulated investment company?

A. unit investment trustsB. closed-end fundsC. open-end fundsD. hedge funds

26. Which of the complying with funds invest particularly in stocks of fast-thriving companies?

A. well balanced fundsB. growth equity fundsC. REITs D. equity revenue funds

27. A fund that invests in securities global, including the United States, is referred to as ______.

an worldwide fund

an arising industry fund

an international fund

a local fund

28. The biggest percent of shared fund assets are invested in ________.

bond funds

equity funds

hybrid funds

money sector funds

29. Sponsors of unit investment trusts earn a profit by ___________________.

deducting monitoring fees from money assets

deducting a percent of any gains in ascollection value

selling shares in the trust at a premium to the price of acquiring the underlying assets

charging portfolio turnover fees

30. Investors who want to liquiday their holdings in a unit investment trust might ___________________.

sell their shares back to the trustee at a discount

market their shares earlier to the trustee at net asset value

sell their shares on the open market

offer their shares at a premium to net asset value

31. Investors who desire to liquidate their holdings in a closed-finish fund may ___________________.

sell their shares ago to the fund at a discount if they wish

offer their shares back to the fund at net ascollection value

market their shares on the open market

sell their shares at a premium to net ascollection worth if they wish

32. __________ money is characterized as one in which the money charges a sales commission to either buy into or leave from the fund.

A load

A no-load

An index

A specialized-sector

33. Which of the adhering to is a false statement regarding open-finish mutual funds?

They offer investors a guaranteed rate of rerevolve.

They offer investors a well-diversified portfolio.

They redeem shares at their net ascollection worth.

They offer low-cost diversification.

34. __________ funds stand prepared to redeem or concern shares at their net ascollection worth.





35. Revenue sharing with respect to shared funds refers to _________.

money companies paying brokers if the broker recommends the fund to investors

permitting certain classes of investors to communicate in industry timing

charging tons to new investors in a shared fund

straight marketing funds over the Internet

36. Higher portfolio turnover:

I. Results in greater tax liability for investors

II. Results in higher trading expenses for the fund, which investors have to pay for

Is a characteristic of asset allocation funds

I only

II only

I and II only

I, II, and also III

38. Most genuine estate investment trusts (REITs) have a debt proportion of around _________.





40. Which of the complying with is not a form of genuine estate investment trust?

I. Equity trust

II. Debt trust

III. Mortgage trust

IV. Unit trust

I and also II only

II only

II and IV only

I, II, and III

41. ______________________ are regularly referred to as mutual funds.

Unit investment trusts

Open-finish investment companies

Closed-end investment companies


43. An official summary of a specific common fund"s planned investment policy have the right to be found in the fund"s _____________.



investment statementD. 12b-1 forms

44. Mutual funds that hold both equities and fixed-income securities in reasonably stable prosections are called ____________________.

income funds

balanced funds

ascollection allocation funds

index funds

______ are mutual funds that differ the prosections of funds invested in particular industry sectors according to the fund manager"s foreactors of the performance of that sector sector.

A. Asset alplace fundsB. Balanced fundsC. Index fundsD. Income funds

46. Specialized-sector funds concentrate their investments in _________________.

bonds of a specific maturity

geographic segments of the actual estate market

federal government securities

securities issued by firms in a certain industry

47. If a mutual fund has actually multiple-course shares, which course commonly has a front-finish load?

Class A

Class B

Class C

Class I

48. The commission, or front-finish fill, paid when you purchase shares in mutual funds might not exceed __________.





You are considering investing in one of several mutual funds. All the funds under consideration have various combicountries of front-end and also back-end loads and/or 12b-1 fees. The longer you setup on staying in the fund you pick, the even more likely you will prefer a fund via a

__________ fairly than a __________, every little thing else equal.

A. 12b-1 fee; front-finish loadB. front-end load; 12b-1 feeC. back-end load; front-finish loadD. 12b-1 fee; back-end load

Under SEC rules, the managers of specific funds are permitted to deduct charges for heralding, brokerage comobjectives, and other sales prices directly from the fund assets fairly than billing investors. These fees are well-known as ____________.

direct operating expenses

back-end loadsC. 12b-1 chargesD. front-finish loads

51. The SEC calls for funds to disclose:

I. After-taxation retransforms for the past year

II. After-taxation retransforms for the last 5-year period

The taxes affect of portfolio turnover

I only

I and also II only

I and III only

I, II, and III

SEC Rule 12b-1 enables managers of specific funds to deduct __________ expenses from fund assets; however, these prices may not exceed

__________ of the fund"s average net assets per year.

marketing; 1%

marketing; 5%

administrative; .5%

administrative; 2%

Consider a shared money with $300 million in assets at the begin of the year and also 12 million shares outstanding. If the gross return on assets is 18% and the total price proportion is 2% of the year-end worth, what is the price of return on the fund?



17.25%D. 17.5%

Consider a no-pack shared money with $200 million in assets and 10 million shares at the start of the year and with $250 million in assets and also 11 million shares at the finish of the year. Throughout the year investors have actually received income distributions of $2 per share and funding acquire distributions of $.25 per share. Assuming that the money carries no debt, and that the complete expense proportion is 1%, what is the rate of rerevolve on the fund?



24.64%D. The answer cannot be figured out from the information provided.

Consider a no-fill common fund via $400 million in assets, 50 million in debt, and also 15 million shares at the start of the year and with $500 million in assets, 40 million in debt, and also 18 million shares at the finish of the year. Throughout the year investors have actually received revenue distributions of $.50 per share and also resources gain distributions of $.30 per share. If the total price ratio is .75%, what is the rate of rerotate on the fund?



8.25%D. The answer cannot be determined from the indevelopment provided.

56. Mutual money returns might be granted pass-via standing if _________________.

basically all revenue is spread to shareholders

the money qualifies for pass-with standing according to the UNITED STATE taxation code

the fund is sufficiently diversified

All of these options (All of the answers need to be true for pass-through status to be granted.)

57. _____ is an example of an exchange-traded money.

An SPDR or spider

A samurai

A Vanguard

An open-end fund

58. If you location an order to buy or offer a share of a shared fund in the time of the trading day, the order will certainly be executed at _____.

the NAV calculated at the industry close at 4 pm New York time

the actual time NAV

the NAV delayed 15 minutes

the NAV calculated at the opening of the following day"s trading

According to the 2014 Mutual Fund Fact Book, _______ of complete assets were in taxable money sector funds and _______ were tax-exempt money sector funds.

35%; 14%

12.3%; 75%

16.3%; 1.8%

5%; 47%

In his 1970 study, Malkiel found that mutual funds that execute well in one period have an roughly ________ opportunity of doing well in the subsequent-year duration.





61. In a recent study, Malkiel found that evidence of persistence in the performance of shared funds ________________ in the 1980s.

grew stronger

remained about the same

ended up being slightly weaker

practically disappeared

62. The ratio of trading task of a portfolio to the assets of the portfolio is dubbed the ____________.

reinvestment ratio

trading rate

portfolio turnover

taxation yield

The Stone Harbor Fund is a closed-end investment agency via a portfolio currently worth $300 million. It has liabilities of $5 million and also 9 million shares exceptional. If the money sells for $30 a share, what is its premium or discount as a percent of NAV?

9.26% premium

8.47% premium

9.26% discountD. 8.47% discount

65. The difference in between well balanced funds and ascollection alarea funds is that _____.

balanced funds invest in bonds while ascollection alplace funds perform not

asset alarea funds invest in bonds while balanced funds carry out not

balanced funds have actually relatively stable proparts of stocks and also bonds while the prosections may vary substantially for ascollection allocation funds

balanced funds make no resources get distributions and ascollection alarea funds make both dividfinish and capital acquire distributions

The Wildlumber Fund sells Class A shares through a front-end pack of 5% and also Class B shares through a 12b-1 fee of 1% every year. If you arrangement to offer the fund after 4 years, are Class A or Class B shares the better choice? Assume a 10% yearly rerevolve net of prices prior to the 12b-1 fee is used.

Class A.

Class B.

Tbelow is no difference.D. The answer cannot be identified from the information offered.

A common money has total assets exceptional of $69 million. During the year the fund bought and also offered assets equal to $17.25 million. This fund"s turnover price was _____.



18.63%D. 33.4%

68. Which type of investment fund is frequently well-known to invest in alternatives and futures in huge scale?

A. commingled fundsB. hedge fundsETFs


69. Advantages of ETFs over common funds encompass all but which one of the following?

ETFs profession continuously, so investors have the right to trade throughout the day.

ETFs deserve to be sold brief or purchased on margin, unprefer fund shares.

ETF suppliers carry out not have to market holdings to money redemptions.

ETF worths can diverge from NAV.

Harold has actually just taken his company public and also owns a huge quantity of minimal stock. For objectives of diversification, what money might he aid create in order to diversify his holdings?

A. commingled fundsB. hedge fundsETF


71. Which of the adhering to funds is many most likely to have a debt ratio of 70% or higher?

A. bond fundB. commingled fundC. mortgage-backed securitiesD. REIT

72. _______ have end up being the main way for investors to speculate in valuable metals.

Strategic revenue funds

Balanced funds

Specialized-sector funds

Exchange-traded funds

73. From 1971 to 2013 the average rerotate on the Wilshire 5000 Index was _________ the rerevolve of the average mutual fund.

A. identical to

B. .9% better than

C. .9% lower than

D. 1.3% better than

74. An open-finish fund has actually a NAV of $16.50 per share. The money charges a 6% load. What is the giving price?



$17.55D. $16.49

75. The sell price of an open-end money is $18 and also the fund is offered via a front-finish fill of 5%. What is the fund"s NAV?



$15.40D. $16.57

A mutual money has $50 million in assets at the start of the year and also 1 million shares exceptional throughout the year. Throughout the year assets grow at 12%. The fund imposes a 12b-1 fee on all shares equal to 1%. The fee is imposed on year-end asset values. If tright here are no distributions, what is the end-of-year NAV for the fund?



$56.12D. $54.55

The assets of a mutual money are $25 million. The liabilities are $4 million. If the money has 700,000 shares superior and pays a $3 dividend, what is the dividend yield?



15%D. 20%

78. Which of the complying with funds are generally many tax-efficient?

A. equity fundsB. bond FundsC. ETFsD. specialized-sector funds

You invest in a shared money that charges a 3% front-finish load, 1% total yearly fees, and also a 2% back-end pack, which decreases .5% per year. How a lot will certainly you pay in fees on a $10,000 investment that does not thrive if you cash out after 3 years of no gain?



$553D. $635

You invest in a shared money that charges a 3% front-end load, 1% total yearly fees, and a 0% back-finish load on Class A shares. The very same fund charges a 0% front-end load, 1% full annual fees, and a 2% back-finish fill on Class B shares. What are the complete fees in year 1 on a Class A investment of $20,000 with no development in value?



$885D. $902

You invest in a common money that charges a 3% front-finish load, 1% complete yearly fees, and a 0% back-end fill on Class A shares. The very same fund charges a 0% front-end load, 1% full annual fees, and a 2% back-finish pack on Class B shares. What are the full fees in year 1 on a Class B investment of $20,000 if you redeem shares through no expansion in value?



$885D. $902

You pay $21,600 to the Laramie Fund, which has actually a NAV of $18 per share at the start of the year. The fund deducted a front-finish load of 4%. The securities in the money boosted in worth by 10% during the year. The fund"s expense proportion is 1.3% and is deducted from year-finish ascollection values. What is your rate of return on the fund if you offer your shares at the end of the year?



6.45%D. 5.63%

83. Which one of the following statements about returns reported by common funds is not correct?

A. Reported retransforms are net of administration costs.B. Reported returns are net of 12b-1 fees.Reported returns are net of brokerage fees phelp on the fund"s trading activity.

Namong these alternatives. (All of the items are consisted of in reported returns.)

84. The optimal Morningstar shared fund performance rating is ________.

five stars

four stars

three stars

2 stars

You are considering investing in a no-fill shared money via an annual price ratio of .6% and an annual 12b-1 fee of .75%. You could likewise invest in a financial institution CD paying 6.5% per year. What minimum yearly price of return need to the money earn to make you better off in the fund than in the CD?



7.25%D. 7.85%

86. The five-star Morningstar rating implies

A. remarkable retransforms compared to risk.B. exceptional threat compared to rerevolve.C. lowest turnover compared to peers.D. lowest fees compared to peers.

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87. Which type of money is regularly priced at a significant discount to net ascollection value?

A. open-finish fundB. closed-finish fundC. hedge fundD. ETF

88. Which kind of money primarily has actually the lowest average cost ratio?

A. actively managed bond fundsB. hedge fundsC. indexed fundsD. actively controlled global funds

89. Approximately what percentage of assets hosted in equity funds in 2014 remained in index funds?



50%D. 60%

90. Disadvantages of ETFs encompass every one of the following except

A. investors incur a bid-ask spread once purchasing.B. investors need to pay a broker fee as soon as purchasing.C. prices are only quoted when each day.D. prices deserve to decomponent from NAV at times.