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15 Cards in this Set
- Front
- Back
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mutual funds were first created in |
1925 |
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the selection of individual securities remains mostly with the |
investor |
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largest financial intermediary in the US |
mutual fund industry |
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Which one of the following statements concerning mutual funds is correct? A) The selection of individual securities remains with the mutual fund investor. B) Mutual funds were first created in the 1980s. C) The mutual fund industry is the largest financial intermediary in the United States. D) Mutual funds are generally highly concentrated portfolios. |
The mutual fund industry is the largest financial intermediary in the United States |
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advantages offered by mutual funds |
full time professional management, automatic reinvestment of dividends, and modest capital outlay for investors |
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one drawback of investing in mutual funds is the |
annual management fee |
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Which of the following are advantages offered by mutual funds? I. professional portfolio management II. dividend reinvestment III. consistent returns in excess of the overall market rate of return IV. modest capital outlay for investors A) I and II only B) I and IV only C) II, III and IV only D) I, II and IV only |
I, II and IV only |
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Which one of the following statements is correct concerning players in the mutual fund industry?A) Security analysts and traders work for the management company. B) Normally a bank serves as the custodian. C) The management company maintains the shareholder records. D) The mutual fund shareholders are the owners of the management company. |
Normally a bank serves as the custodian. |
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During the 5 year market cycle of 2004-2008, in which category of funds did a majority of funds outperform the market average? A) large cap funds. B) small cap funds. C) asset allocation funds. D) in no category did a majority of funds outperform the market average |
in no category did a majority of funds outperform the market average |
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Which of the following statements best describes the legal organization of mutual funds?A) funds are organized as a single entity that handles all functions such as custody and investment decisions. B) funds split their basic functions such as record keeping and investment decisions among two or more companies C) funds are owned by the company that manages them. D) a distributor keeps track of investment and redemption requests from shareholders and maintains other shareholder records. |
funds split their basic functions such as record keeping and investment decisions among two or more companies |
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To operate as a regulated investment company and enjoy the related tax benefits, a mutual fund must annually distribute to its shareholders A) half of its realized capital gains, and interest and dividend income. B) none of its realized capital gains, but all of its interest and dividend income. C) all of its realized capital gains, and at least 90 percent of its interest and dividend income. D) all of its realized capital gains and interest and dividend income. |
all of its realized capital gains, and at least 90 percent of its interest and dividend income. |
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Mutual fund investors delegate all of the following decisions to the fund's managers except A) which companies and industries to invest in. B) when to buy and sell individual stocks. C) how many securities to hold in the portfolio. D) how to allocate investments among different classes of assets such as stocks, bonds, cash and real estate. |
how to allocate investments among different classes of assets such as stocks, bonds, cash and real estate. |
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Nearly all mutual funds operate as regulated investment companies. This means that A) they are no-load funds. B) portfolio decisions are mandated by government authorities. C) they do not pay taxes on their income. D) their investments are guaranteed by the FDIC. |
they do not pay taxes on their income. |
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An open-end investment company A) is involved in all trades of its shares. B) sells shares at a discounted NAV price. C) trades like a stock on the exchanges. D) has a set number of shares. |
is involved in all trades of its shares |
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Which of the following characteristics apply to closed-end mutual funds? I. unlimited number of outstanding shares II. transactions between shareholders III. market prices may be higher or lower than NAV IV. fund repurchase of shares at any time A) I and IV only B) II and III only C) I, II and III only D) II, III and IV only |
I, II and III only |
