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1 | | One kind of mutual fund deploys its funds in short-term instruments, including such things as Treasury bills, commercial paper, and large CDs. This is the: |
| | A) | REIT |
| | B) | hybrid fund |
| | C) | closed end investment company |
| | D) | equity mutual fund |
| | E) | money market mutual fund |
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2 | | The number of shares outstanding for a mutual fund is determined by customer demand for the shares; hence, mutual funds are referred to as: |
| | A) | general partnerships |
| | B) | limited partnerships |
| | C) | open end |
| | D) | REITs |
| | E) | closed end |
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3 | | In terms of the dollar amount of total assets held by the industry as of 2007, mutual funds are closest to: |
| | A) | commercial banks |
| | B) | insurance companies |
| | C) | savings institutions |
| | D) | private pension funds |
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4 | | A "growth" mutual fund would be expected to purchase: |
| | A) | high quality corporate bonds |
| | B) | stocks |
| | C) | commercial paper |
| | D) | real estate |
| | E) | long-term U.S. Treasury securities |
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5 | | A "no-load mutual fund" is: |
| | A) | one that has zero operating expenses. |
| | B) | typically marketed directly to customers, charging no commission. |
| | C) | a type that no longer exists. |
| | D) | a type that does not invest in stock. |
| | E) | one that has a negative rate of return. |
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6 | | Which of the following is most obviously not a long-term fund? |
| | A) | tax exempt money market mutual fund |
| | B) | equity mutual fund |
| | C) | REIT |
| | D) | asset allocation fund |
| | E) | hybrid fund |
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7 | | A mutual fund prospectus: |
| | A) | will state the fund's promised rate of return |
| | B) | is required by the FDIC |
| | C) | indicates the investment objectives of the fund |
| | D) | is the place for investors to find up-to-date net asset value information. |
| | E) | a and b |
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8 | | The number of mutual funds, as of 2004, was in the neighborhood of: |
| | A) | Less than 500 |
| | B) | 1,000 to 2,000 |
| | C) | 5,000 to 10,000 |
| | D) | 15,000 to 20,000 |
| | E) | Over 25,000 |
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9 | | A "hybrid" fund is one that: |
| | A) | invests in both bonds and stocks |
| | B) | started as a closed-end investment company, but changed to a mutual fund |
| | C) | has different "loads" for different classes of investors in the fund |
| | D) | can serve as an investment vehicle, but also provides check-writing privileges. |
| | E) | invests in derivative securities, as well as stocks. |
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10 | | So-called 12b-1 fees are: |
| | A) | fees that investment companies must pay to the SEC |
| | B) | fees charged by some mutual funds, due to distribution and marketing costs |
| | C) | up-front "load" fees, charged by some mutual funds |
| | D) | back-end "load" fees, charged by some mutual funds |
| | E) | fees charged by mutual funds, to compensate the portfolio manager. |
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11 | | If we divide the current value of a mutual fund's investment portfolio by the number of the mutual fund's own shares outstanding, we have: |
| | A) | the dollar amount of the fund's "load" |
| | B) | the fund's 12b-1 fee |
| | C) | the average total account balance of the fund's investors |
| | D) | the net asset value of the fund |
| | E) | the number of investors in the fund |
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12 | | A mutual fund that charges a commission or fee on its sales of shares to is classified as a/an: |
| | A) | NAV fund |
| | B) | 12b-1 fund |
| | C) | closed end fund |
| | D) | marked to market fund |
| | E) | load fund |
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13 | | The first mutual fund was established in the: |
| | A) | 1890s |
| | B) | 1920s |
| | C) | 1940s |
| | D) | 1960s |
| | E) | 1970s |
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14 | | A mutual fund that invests solely in stocks would be categorized as a/an: |
| | A) | bond fund |
| | B) | fixed income fund |
| | C) | money market fund |
| | D) | equity fund |
| | E) | (a) and (b) |
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15 | | A large number (about 25%) of long-term mutual funds are _____________ funds, buying securities in proportions similar to those of a major stock index. |
| | A) | small cap |
| | B) | large cap |
| | C) | fixed income |
| | D) | money market |
| | E) | index |
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16 | | Data in the text from 2006 show that roughly _____________ of U.S. households owned mutual funds. |
| | A) | one-tenth |
| | B) | one-quarter |
| | C) | one-half |
| | D) | three quarters |
| | E) | ninety percent |
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17 | | Jameson Mutual Fund's investment portfolio is comprised of the following: 1 million shares of Alright Automotive (current price is $50 per share); 3 million shares of Best-Shape Exercise Equipment (current price is $30 per share); and 5 million shares of California Fruit Corp. (current price is $45 per share). Jameson Mutual Fund has sold a total of 15 million of its own shares to customers. What is Jameson Mutual Fund's net asset value? |
| | A) | $ 21.00 |
| | B) | $ 24.33 |
| | C) | $ 41.67 |
| | D) | $ 40.56 |
| | E) | $125.00 |
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