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Investing in Mutual Funds
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Personal Finance Study Set 15

Business

Quiz 16 :
Investing in Mutual Funds

Quiz 16 :
Investing in Mutual Funds

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At the beginning of 2018,there were almost 12,000 investment companies sponsoring mutual funds.
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True False
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True

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The major reasons why investors purchase mutual funds are professional management and diversification.
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True False
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Answer:

True

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Because of professional management,there is no need for the individual investor to evaluate a mutual fund investment.
Free
True False
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False

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Today,there are more investment companies that offer closed-end funds than there are that offer open-end funds.
True False
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Investors in an open-end fund are free to buy and sell shares at the net asset value.
True False
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There are more investment companies that offer exchange-traded funds than there are that offer open-end mutual funds.
True False
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The potential return on any investment should be indirectly related to the risk the investor assumes.
True False
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A load fund is a mutual fund in which investors pay a commission either when they purchase shares.
True False
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If you need your money in a short period of time,you should consider conservative investments with less risk.
True False
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You should consider your tolerance for risk before investing in mutual funds.
True False
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For a mutual fund,the annual management fee is a fixed percentage of the fund's total liabilities.
True False
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Mutual funds have been around for a long time and became popular in the U.S.before the Great Depression in 1929.
True False
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Investors 72 years or older are less likely to invest in mutual funds than any other age group.
True False
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When you invest in Class A shares,you pay a sales charge when you sell your mutual fund shares.
True False
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Class C shares,with their ongoing higher 12b-1 fees,may be more expensive than Class A shares over a period of years.
True False
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All details related to management fees,sales fees,12b-1 fees,and other expenses are contained in a mutual fund's prospectus.
True False
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Mutual funds that allocate their investments among common stocks and bonds are referred to as small cap funds.
True False
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Mutual funds that invest in smaller,lesser-known companies that offer higher growth potential are referred to as sector funds.
True False
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High-yield bond funds are sometimes referred to as junk-bond funds.
True False
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A mutual fund that provides tax-free interest income is referred to as a long-term U.S.bond fund.
True False
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