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52 Cards in this Set
- Front
- Back
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Unlike a corporation who sells securities for the operation of the company, a _________ ______ raises capital to invest on behalf of its shareholders.
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Mutual Fund
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A mutual fund whos stated purpose is long term growth is a _________ _________.
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Growth Fund
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A fund whose stated objective is to provide a higher than average current investment return would be know as an _________ ______.
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Income Fund
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Mutal funds that seek to concentrate their investments (at least 25%) within a single industry or group of related industries or even with a geographical area are know as __________ ___________.
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Specialized funds
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An investor who seeks primarily to preserve his original principal while at the same time make some modest gain would do well with a ___________ _____.
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Balanced Fund
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Those who want absolute safety can invest in ____ ___________ bonds or _________ _______funds.
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U.S. government bonds
Municipal bond funds |
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A mutual fund is a company who has a governing board of directors. Who makes the day to day investment decisions?
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The Money Manager/Management company is contracted to manage the fund.
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What Form is sent to each investor identifying the tax status of distributions.
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Form 1099
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The management company is hired to make sure the fund fullfills its objective. Who is hired to keep the actual funds?
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A Custodian
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T/F
The custodian sometimes performs the role of transfer agent. They transfer monies and shares to the correct person's account. |
True
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Three methods by which an investor may buy shaes of a mutual fund.
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Fund to underwriter to dealer to investor (NAV plus dealer and underwriter concessions.)
Fund to underwriter to investor (NAV plus sales charge) Fund to investor (No Load funds) |
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Three basic areas of comparison of various mutual funds.
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Analyze growth and income mutual funds.
Compare funds on the basis of their statistical performance. Compare funds non-statistical features such as conversion priv, systematic withdrawal plans. etc... |
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According to the Securities Act of 1933 a new issue must have a ________ prepared and delivered prior to or at the time of the sale.
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Prospectus
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What is the name of the document that provides investors with additional information not found in a mutual fund prospectus?
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Statement of Additional Information. (SAI)
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The SEC no-approval clause is found where in the prospectus?
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Bottom of Front cover
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The value upon which all mutual fund purchses and redeptions are based is the _____ ______ value.
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Net Asset Value
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The price at which the shares are offered to the public is called the _______ ______ price
or the _______ ________ price. |
public offering price
retail asking price |
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When a public investor purchases a mutual fund there is a charge called a _______ charge or a ______ ______.
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Sales charge
sales load |
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The larger the investment the lower the sales charge. This is known as.
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Breakpoints
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Another way to qualify for the beakpoint is by signing a _____ ___ _______. (LOI)
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Letter of Intent
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By Signing a _________ ___ _____ an investor is stating his intention to invest an amount equal to or greater than one of the breakpoint levels in the next 13 months.
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Letter of Intent
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A way of qualifying for a breakpoint that allows an investor to invest over a long period of time to reach a breakpoint. This includes amount invested or current value.
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Right of Accumulation
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T/F
The investor cannot defer taxes on his distributions from a mutual fund by reinvestinging them into additional shares. |
True
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Why reinvest dividends and interest back into your mutual fund? Two reasons...
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Compounding effect
saving sales charges on new shares |
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Mutual funds are given special tax treatment if they comply with certain conditions. One of the most important of these conditions is that they distribute at least ___% of their income to shareholders.
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90%
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What section of the IRS code deals with mutual fund tax treatment?
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Subchapter M
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the Last part of the prospectus in made up of the.
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Finacial statements
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A program where an investor enters into a contractual plan where he is required to make periodic payments to benefit from dollar cost averaging is organized as a ______ ________ _______.
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Unit investment trust
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Two types of contactual plans go the names ________ ____ _______ and ______ _______.
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Front-end load
Spread-load |
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In a front-end load contractual plan, typically ____% of the first year's investments are deducted as sales charges. then the charges are reduced to a max of ____%
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50%
9% |
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In a spread-load contractual plan the load may be spread over a 4 year period with a max of ___% each year.Then a max __% for the remainder of the contract.
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20%
9% |
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A fund that acts as the distributor of its own shares is called a ______-_______ fund.
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No-Load
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Share classes are:
Class ___ and Class ___ |
A and B
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A share that always has a load on the purchase, but no redeption fee is known as a Class ____ share.
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Class A
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A share that never has a load on the purchase, but have a Conditional Deferred Sales Load/charge (CDSL/CDSC)or back-end load. Declining redemption charge.
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Class B
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T/F
A class B share will eventually become a class A share. Explain |
True
The redemtion charge declines over a period of years(6-8) to eventually to 0 charge. It then becomes a class A share. |
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A class of share that has no acquisiton load and higher expenses, but the redemtion charge usually rund for only one year. is a class __.
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Class "C"
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Of all the share classes, class ___ shares have the lowest operating costs over thge long run.
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Class "A"
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The investment company act of 1940 created three types of investment companies:
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Face Amount Certificate Companies
Unit Investment Trusts Managment Companies - Closed-end - Open-end (Mutual Fund) |
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The Unit Investment Trust invests in a _____ portfolio and offer _________ securities.
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Fixed
Redeemable |
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An investment company which professionally manages a portfolio of securities for its shareholders is a _________ _______.
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Management Company
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Two types of managment companies.
A Mutual Fund is what type? |
Open-end / Closed End
Mutual fund is an Open-end |
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An investment company that offer a limited number of shares outstanding is a ______-____ company.
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Closed-end
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In reading a mutual fund quotation, the letters following the company name, "p", "t" and "r" mean what?
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They indicate the fee types.
p = 12b-1 fee r = redemption fee/backend load t = indicates both a 12b1 fee and redemption fee. |
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The column Headed "NAV Chg." indicates what point?
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The change +/- of the NAV for that fund from the previous day.
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The investment Compnay Act 1940 defines the follow person as an ________ person. Anyone directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of a company.
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Affiliated Person
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According to the ICA of 1940.
Any certificate, investment contract, or other security that represents an obligation on the part of the issuer to pay a stated sum in return for payment installments is refered to as a. |
Face amount certificate
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According to the ICA of 1940, In repect to an investment company,investment adviser or principal underwriter. All affiliate persons, their family members and business contacts within the past 2 years are considered ______ persons.
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Interested
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Any certificate, investment contract, or other security providing for a series of periodic payments by the holder and representing an individual interest is called a.
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Periodic Payment Plan Certificate.
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Any security under the terms of which the holder,upon presentation to the issuer, is entitled to receive his proportionate share of the issuer's current net assets.
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Redeemable Security
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The difference between the price of a security to the public and the net portion of the proceeds from its sale less deductions for various fees and expenses.
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Sales Load
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What rule is defined by "Payment of asset-based sales loads by registered open-end management investment companies."
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Rule 12b-1
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