Question 1

Net asset value is defined as ________.

Accepted Answer

A)   book value of assets divided by shares outstanding
B)   book value of assets minus liabilities divided by shares outstanding
C)   market value of assets divided by shares outstanding
D)   market value of assets minus liabilities divided by shares outstandingE) B) and D)
F) A) and B)

Question 2

As of 2017, approximately ________ of mutual fund assets were invested in bond funds.

Accepted Answer

A)   22%
B)   32%
C)   37%
D)   47%E) A) and D)
F) None of the above

Question 3

SEC Rule 12b-1 allows managers of certain funds to deduct ________ expenses from fund assets; however, these expenses may not exceed ________ of the fund's average net assets per year.

Accepted Answer

A)   marketing; 1%
B)   marketing; 5%
C)   administrative; .5%
D)   administrative; 2%E) All of the above
F) A) and D)

Question 4

Advantages of ETFs over mutual funds include all but which one of the following?

Accepted Answer

A)   ETFs trade continuously, so investors can trade throughout the day.
B)   ETFs can be sold short or purchased on margin, unlike fund shares.
C)   ETF providers do not have to sell holdings to fund redemptions.
D)   ETF values can diverge from NAV.E) A) and D)
F) B) and C)

Question 5

If a mutual fund has multiple-class shares, which class typically has a front-end load?

Accepted Answer

A)   Class A
B)   Class B
C)   Class C
D)   Class IE) B) and D)
F) B) and C)

Question 6

________ are mutual funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector.

Accepted Answer

A)   Asset allocation funds
B)   Balanced funds
C)   Index funds
D)   Income fundsE) C) and D)
F) A) and D)

Question 7

Which of the following is a false statement regarding open-end mutual funds?

Accepted Answer

A)   They offer investors a guaranteed rate of return.
B)   They offer investors a well-diversified portfolio.
C)   They redeem shares at their net asset value.
D)   They offer low-cost diversification.E) A) and B)
F) All of the above

Question 8

A mutual fund has $50 million in assets at the beginning of the year and 1 million shares outstanding 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 there are no distributions, what is the end-of-year NAV for the fund?

Accepted Answer

A)   $50
B)   $55.44
C)   $56.12
D)   $54.55E) A) and D)
F) A) and C)

Question 9

Part B of a mutual fund prospectus contains information about:
I. Fund holdings by directors and officers
II. Front-end and back-end loads
III. Securities held by the fund at the end of the fiscal year

Accepted Answer

A)   I only
B)   I and II only
C)   I and III only
D)   I, II, and IIIE) C) and D)
F) All of the above

Question 10

The average maturity of fund investments in a money market mutual fund is ________.

Accepted Answer

A)   slightly more than 1 month
B)   slightly more than 1 year
C)   about 9 months
D)   between 2 and 3 yearsE) A) and B)
F) B) and C)

Exam 4: Mutual Funds and Other Investment Companies

If a mutual fund has multiple-class shares, which class typically has a front-end load?

Correct Answer
verified

SEC Rule 12b-1 allows managers of certain funds to deduct expenses from fund assets; however, these expenses may not exceed of the fund's average net assets per year.

Correct Answer
verified

Correct Answer
verified

Advantages of ETFs over mutual funds include all but which one of the following?

Correct Answer
verified

Net asset value is defined as ________.

Correct Answer
verified

________ are mutual funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector.

Correct Answer
verified

As of 2017, approximately ________ of mutual fund assets were invested in bond funds.

Correct Answer
verified

Which of the following is a false statement regarding open-end mutual funds?

Correct Answer
verified

The average maturity of fund investments in a money market mutual fund is ________.

Correct Answer
verified

Part B of a mutual fund prospectus contains information about: I. Fund holdings by directors and officers II. Front-end and back-end loads III. Securities held by the fund at the end of the fiscal year

Correct Answer
verified

Exam 4: Mutual Funds and Other Investment Companies

If a mutual fund has multiple-class shares, which class typically has a front-end load?

Correct AnswerverifiedShow Answer

SEC Rule 12b-1 allows managers of certain funds to deduct ________ expenses from fund assets; however, these expenses may not exceed ________ of the fund's average net assets per year.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Advantages of ETFs over mutual funds include all but which one of the following?

Correct AnswerverifiedShow Answer

Net asset value is defined as ________.

Correct AnswerverifiedShow Answer

________ are mutual funds that vary the proportions of funds invested in particular market sectors according to the fund manager's forecast of the performance of that market sector.

Correct AnswerverifiedShow Answer

As of 2017, approximately ________ of mutual fund assets were invested in bond funds.

Correct AnswerverifiedShow Answer

Which of the following is a false statement regarding open-end mutual funds?

Correct AnswerverifiedShow Answer

The average maturity of fund investments in a money market mutual fund is ________.

Correct AnswerverifiedShow Answer

Part B of a mutual fund prospectus contains information about: I. Fund holdings by directors and officers II. Front-end and back-end loads III. Securities held by the fund at the end of the fiscal year

Correct AnswerverifiedShow Answer

Correct Answer
verified

SEC Rule 12b-1 allows managers of certain funds to deduct expenses from fund assets; however, these expenses may not exceed of the fund's average net assets per year.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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