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| 1 | |
Which one of the following statements regarding open-end mutual funds is false? |
| | A) | The funds redeem shares at net asset value. |
| | B) | The funds offer investors professional management. |
| | C) | The funds offer investors a guaranteed rate of return. |
| | D) | B and C |
| | E) | A and B |
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| 2 | |
Which one of the following statements regarding closed-end mutual funds is false? |
| | A) | The funds always trade at a discount from NAV. |
| | B) | The funds redeem shares at their net asset value. |
| | C) | The funds offer investors diversification. |
| | D) | A and B |
| | E) | None of the above |
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| 3 | |
Century fund had average daily assets of $3.0 billion in 2009. The fund sold $750 million worth of stock and purchased $850 million worth of stock during the year. Century fund's turnover ratio is |
| | A) | 27.5%. |
| | B) | 12%. |
| | C) | 15%. |
| | D) | 25%. |
| | E) | 20%. |
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| 4 | |
Which of the following functions do investment companies perform for their investors? |
| | A) | Record keeping and administration |
| | B) | Professional management |
| | C) | Diversification and divisibility |
| | D) | Lower transaction costs |
| | E) | All of the above |
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| 5 | |
Large amounts of money invested in a portfolio that is fixed for the life of the fund are called |
| | A) | closed-end funds. |
| | B) | unit investment trusts. |
| | C) | REITS. |
| | D) | open-end funds. |
| | E) | redeemable trust certificates. |
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| 6 | |
At issue, offering prices of open-end funds will typically be |
| | A) | less than NAV due to limited demand. |
| | B) | greater than NAV due to greater demand. |
| | C) | less than NAV due to loads and commissions. |
| | D) | NAV or greater due to loads and commissions. |
| | E) | less than or greater than NAV with no apparent pattern. |
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| 7 | |
Ultra Fund had year-end assets of $862,000,000 and liabilities of $12,000,000. There were 32,675,254 shares in the fund at year-end. What was Ultra Fund's Net Asset Value? |
| | A) | $28.17 |
| | B) | $25.24 |
| | C) | $19.62 |
| | D) | $26.01 |
| | E) | $21.56 |
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| 8 | |
Premier Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Premier's NAV was $32.18, how many shares must have been held in the fund? |
| | A) | 21,619,346.92 |
| | B) | 22,930,546.28 |
| | C) | 24,860,161.59 |
| | D) | 25,693,645.25 |
| | E) | None of the above |
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| 9 | |
Most actively managed mutual funds, when compared to a market index such as the Wilshire 5000, |
| | A) | beat the market return in all years. |
| | B) | beat the market return in most years. |
| | C) | exceed the return on index funds. |
| | D) | do not outperform the market. |
| | E) | None of the above is a correct statement. |
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| 10 | |
You purchased shares of a mutual fund at a price of $17 per share at the beginning of the year and paid a front-end load of 5.0%. If the securities in which the fund invested increased in value by 12% during the year, and the fund's expense ratio was 1.0%, your return if you sold the fund at the end of the year would be ____________. |
| | A) | 4.75 |
| | B) | 5.45 |
| | C) | 5.65 |
| | D) | 4.39 |
| | E) | None of the above |
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