Personal Finance, Chapter 13

The major advantage of mutual funds to the small investor is

In The Wall Street Journal's listing of mutual funds, a "t" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

Value funds look for stocks with relatively all the following except

The approximate yield on a mutual fund depends only on the fund's dividend income and capital gains distributions.

A mutual fund's NAV is its

A fund's prospectus would provide information about a fund's fee structure.

A(n) ____ actually runs the portfolio and makes the buy and sell decisions.

A closed-end investment company can create an unlimited number of shares.

A mutual fund prospectus is required to fully disclose all fund fees and expenses.

A balanced fund that emphasizes growth in capital is called a(n)

Financial leverage is less of a factor in real estate investment returns than with other types of investments.

The fund whose main objective is growth is known as a(n) ____ fund.

Growth-and-income funds invest most of their capital in common stocks.

Spiders and Diamonds are examples of ETFs.

A technology fund is an example of a sector fund.

Generally speaking, socially responsible funds abstain from investing in alcohol, gambling, or tobacco stocks.

A no-load fund has no

Exchange-traded funds have characteristics of both closed-end and open-end funds.

The share price of a closed-end fund is determined by

Most mutual funds allow investors to participate in

The lower the R2, the closer the relationship between an ETF and its associated target index.

Investors tend to use mutual funds for which of the following reasons

A(n) ____ fund invests primarily in a portfolio of common stocks for the income they provide.

Advantages of exchange-traded funds over mutual funds include all of the following except

The net asset value (NAV) per share is found by dividing the market value of the fund's securities less the fund's liabilities by the number of shares outstanding.

Asset allocation funds invest entirely in U.S. and foreign stocks and bonds.

Aggressive growth funds typically buy stocks with high price/earnings ratios and stocks with volatile price fluctuations.

By using automatic reinvestment plans, dividend and capital gains are used to automatically buy additional shares in the fund.

While ETFs offer many of the benefits of mutual funds, they have the tax-timing disadvantages not present with otherwise comparable mutual funds.

Redeeming your mutual fund shares might result in a charge called

Closed-end investment companies are characterized by

The major reason that investors use mutual funds is their contractual plans, which force regular investing.

Which of the following bond mutual funds would provide tax-free income?

An investor with a small amount of money should stick to using load funds instead of no-load funds.

An investment option that allows fund shareholders to funnel fixed amounts of money from their paychecks or bank accounts automatically into a mutual fund is a(n)

There are more closed-end investment companies than there are open-end companies.

Future fund performance is the real key to investment success with mutual funds. One important element to examine when attempting to predict a fund's future performance is the

A fund that invests only in a particular industry would be a ____ fund.

The price per share of a closed-end investment fund could be lower than its NAV.

In The Wall Street Journal's listing of mutual funds, a "p" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

What type of REIT is most attractive to income-oriented investors?

Indexed funds have high realized capital gains.

Advantages of exchange traded funds over mutual funds include a broader market focus.

A mutual fund cannot charge more than 6.5 percent in total sales charges and fees.

Open-ended mutual funds companies buy their shares back from investors at NAV.

The expected cash flows of a real estate investment are determined by rent, depreciation, and taxes.

Global mutual funds can invest both in domestic and international stocks.

In The Wall Street Journal's listing of mutual funds, an "r" after the mutual fund name and before the NAV means that the particular mutual fund has a ____ associated with it.

____ would not be a reason for purchasing mutual funds.

Dividend income and capital gains distributions are taxed at identical tax rates.

Balanced funds invest in a proportionate amount of common and preferred stocks and bonds.

It is almost impossible to lose money in a mutual fund as the result of fraud or the mutual fund company's bankruptcy.

Low-load funds do not charge a commission upon initial purchase.

The primary investment objective of bond funds is income.

The current market value of all the securities a mutual fund owns is called the

A closed-end investment company that invests in various types of real estate and mortgages is a

Mutual funds do not offer

With open-end mutual funds, investors cannot lose more than they invested.

The fund whose main objective is to simply match the market known as a(n) ____ fund.

Value funds typically invest in stocks that do not pay dividends and have a high price/earnings ratio.

Index funds are actively managed.

Asset allocation funds invest money in

An open-end investment company is commonly known as a mutual fund.

Which of the following are characteristic of exchange-traded mutual funds?

A mutual fund allows investors to

The primary purpose of investing in income property is to produce an attractive annual cash flow.

Socially responsible funds typically avoid investing in

The objective of bond and money market funds is growth.

A mutual fund's price per share will increase if its underlying holdings increase in value.

Open-ended mutual funds can be traded on an intraday basis.

An annual fee charged by some mutual funds to cover marketing and distribution expenses is the

Which of the following is not a source of mutual fund returns?

The size of a mutual fund's management fee is related to the fund's performance.

What would the NAV of an open-ended mutual fund priced at $10 be if the load is 4%?

All no-load funds charge an upfront fee to purchase shares of a mutual fund.

Index funds have provided competitive rates of return because

All mutual funds have management fees.

The ____ is a service offered by mutual funds that helps investors earn compound interest on their investments.

A(n) ____ fund is quite speculative.

Conversion privileges allow investors to exchange one fund's shares for that of another, as long as the funds are in the same fund family.

More people invest in mutual funds than in any other type of investment product.

Equity-income funds emphasize capital appreciation in their investment goals.

A mutual fund's NAV is calculated

First-time real estate investors should consider investing in commercial properties.

Exchange-traded funds can create new shares to meet demand.

Another name for a mutual fund is

Mutual fund conversion privileges can often be exercised online.

A downside of investing in income property is

A behavioral bias in mutual fund investing where investors view recent performance as overly indicative of a fund's future performance is known as

Exchange-traded mutual funds are actually closed-end mutual funds.

Asset allocation funds concentrate on one type of investment.

Growth funds are mutual funds designed for short-term investing.

If you are a mutual fund investor who needs steady income, you might take advantage of a fund's

For most investors, the best way to deal in foreign securities is through an international mutual fund.

If a mutual fund provides for automatic reinvestment, the reinvested dividends will not be taxed until the shares are redeemed.

ETFs are set up to protect investors from capital gains taxes better than most mutual funds can.

A(n) ____ sells fund shares, either directly to the public or through certain authorized dealers.

The price an investor can sell his shares of an open-end mutual fund is the net asset value.

A mutual fund with an objective of both growth and income is a(n)

To be a true no-load fund, there can be a maximum ____ load and a maximum ____ 12(b)-1 fee.

Both load and no-load funds will always charge a

A real estate investment trust that invests only in mortgages is called an equity trust.

Which of the following combines the operating characteristics of an open-end fund with some of the trading characteristics of a closed-end fund?

An example of a commercial property is a(n)

Money funds are high in both liquidity and risk.

Expected cash flows from real estate investments are determined by

A 12b-1 fee can only be charged by a load mutual fund.

Closed-end mutual funds companies buy their shares back from investors at NAV.

The major benefit to small investors of mutual funds is diversification.

Dividend income, capital gains distributions, and changes in the fund's share price are all sources of return for a mutual fund.

A mutual fund is owned by the management company.

Speculating in raw land is a low-risk investment approach.

Closed-end mutual funds can trade at either a discount or a premium from their net asset value.