Quesiti d'esame (85 domande) - Investments

D. III, I, II, IV

14. Which of the following result in a taxable event for investors? I. Short-term capital gain distributions

from the fund II. Dividend distributions from the fund III. Long-term capital gain distributions from the fund

D. I, II, and III

15. The type of mutual fund that primarily engages in market timing is called _______.

D. an asset allocation fund

16. As of 2011, approximately _____ of mutual fund assets were invested in equity funds.

B. 54%

17. As of 2011, approximately _____ of mutual fund assets were invested in bond funds.

A. 14%

18. As of 2011, approximately _____ of mutual fund assets were invested in money market funds.

B. 26%

19. Management fees for open-end and closed-end funds typically range between _____ and _____.

A. .2%; 1.5%

20. The primary measurement unit used for assessing the value of one's stake in an investment company is

___________________.

A. net asset value

21. Net asset value is defined as ________________________.

D. market value of assets minus liabilities divided by shares outstanding

22. Assume that you have just purchased some shares in an investment company reporting $500 million in

assets, $50 million in liabilities, and 50 million shares outstanding. What is the net asset value (NAV) of

these shares?

B. $9

23. Assume that you have recently purchased 100 shares in an investment company. Upon examining the

balance sheet, you note that the firm is reporting $225 million in assets, $30 million in liabilities, and 10

million shares outstanding. What is the net asset value (NAV) of these shares?

C. $19.50

24. The Vanguard 500 Index Fund tracks the performance of the S&P 500. To do so, the fund buys shares in

each S&P 500 company __________.

A. in proportion to the market value weight of the firm's equity in the S&P 500

25. Which of the following is not a type of managed investment company?

A. Unit investment trusts

26. Which of the following funds invest specifically in stocks of fast-growing companies?

B. Growth equity funds

27. A fund that invests in securities worldwide, including the United States, is called ______.

C. a global fund

28. The greatest percentage of mutual fund assets are invested in ________.

B. equity funds

29. Sponsors of unit investment trusts earn a profit by ___________________.

C. selling shares in the trust at a premium to the cost of acquiring the underlying assets

30. Investors who want to liquidate their holdings in a unit investment trust may ___________________.

B. sell their shares back to the trustee at net asset value

31. Investors who want to liquidate their holdings in a closed-end fund may ___________________.

C. sell their shares on the open market

32. __________ fund is defined as one in which the fund charges a sales commission to either buy into or

exit from the fund.

A. A load

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

A. They offer investors a guaranteed rate of return.

34. __________ funds stand ready to redeem or issue shares at their net asset value.

C. Open-end

35. Revenue sharing with respect to mutual funds refers to _________.

A. fund companies paying brokers if the broker recommends the fund to investors

36. Higher portfolio turnover: I. Results in greater tax liability for investors II. Results in greater trading costs

for the fund, which investors have to pay for III. Is a characteristic of asset allocation funds

D. I, II, and III

37. Low-load mutual funds have front-end loads of no more than _____.

B. 3%

38. Most real estate investment trusts (REITs) have a debt ratio of around _________.

D. 70%

39. Measured by assets, about _____ of funds are money market funds.

B. 25%

40. Which of the following is not a type of real estate investment trust? I. Equity trust II. Debt trust III.

Mortgage trust IV. Unit trust

C. II and IV only

41. ______________________ are often called mutual funds.

B. Open-end investment companies

42. Mutual funds account for roughly ______ of investment company assets.

D. 90%

43. An official description of a particular mutual fund's planned investment policy can be found in the

fund's _____________.

A. prospectus

44. Mutual funds that hold both equities and fixed-income securities in relatively stable proportions are

called ____________________.

B. balanced funds

45. ______ 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.

A. asset allocation funds

46. Specialized-sector funds concentrate their investments in _________________.

D. securities issued by firms in a particular industry

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

A. Class A

48. The commission, or front-end load, paid when you purchase shares in mutual funds may not exceed

__________.

C. 8.5%

49. You are considering investing in one of several mutual funds. All the funds under consideration have

various combinations of front-end and back-end loads and/or 12b-1 fees. The longer you plan on remaining

in the fund you choose, the more likely you will prefer a fund with a __________ rather than a __________,

everything else equal.

B. front-end load; 12b-1 fee

50. Under SEC rules, the managers of certain funds are allowed to deduct charges for advertising,

brokerage commissions, and other sales expenses directly from the fund assets rather than billing

investors. These fees are known as ____________.

C. 12b-1 charges

51. The SEC requires funds to disclose: I. After-tax returns for the past year II. After-tax returns for the last

5-year period III. The tax impact of portfolio turnover

D. I, II, and III

52. 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.

A. marketing; 1%

53. Consider a mutual fund with $300 million in assets at the start of the year and 12 million shares

outstanding. If the gross return on assets is 18% and the total expense ratio is 2% of the yearend value,

what is the rate of return on the fund?

A. 15.64%

54. Consider a no-load mutual fund with $200 million in assets and 10 million shares at the start of the year

and with $250 million in assets and 11 million shares at the end of the year. During the year investors have

received income distributions of $2 per share and capital gain distributions of $.25 per share. Assuming that

the fund carries no debt, and that the total expense ratio is 1%, what is the rate of return on the fund?

B. 23.75%

55. Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million shares at

the start of the year and with $500 million in assets, 40 million in debt, and 18 million shares at the end of

the year. During the year investors have received income distributions of $.50 per share and capital gain

distributions of $.30 per share. If the total expense ratio is .75%, what is the rate of return on the fund?

A. 12.09%

56. Mutual fund returns may be granted pass-through status if _________________.

D. All of these options (All of the answers must be true for pass-through status to be granted.)

57. _____ is an example of an exchange-traded fund.

A. An SPDR or spider

58. If you place an order to buy or sell a share of a mutual fund during the trading day, the order will be

executed at _____.

A. the NAV calculated at the market close at 4 pm New York time

59. According to the 2011 Mutual Fund Fact Book, _______ of total assets were in taxable money market

funds and _______ were tax-exempt money market funds.

C. 22%; 3.9%

60. In his 1970 study, Malkiel found that mutual funds that do well in one period have an approximately

________ chance of doing well in the subsequent-year period.

C. 65%

61. In a recent study, Malkiel found that evidence of persistence in the performance of mutual funds

________________ in the 1980s.

D. virtually disappeared

62. The ratio of trading activity of a portfolio to the assets of the portfolio is called the ____________.

C. portfolio turnover

63. Which of the following ETFs tracks the S&P 500 Index?

D. Spiders

64. The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $300

million. It has liabilities of $5 million and 9 million shares outstanding. If the fund sells for $30 a share, what

is its premium or discount as a percent of NAV?

D. 8.47% discount

65. The difference between balanced funds and asset allocation funds is that _____.

C. balanced funds have relatively stable proportions of stocks and bonds while the proportions may vary

dramatically for asset allocation funds

66. The Wildwood Fund sells Class A shares with a front-end load of 5% and Class B shares with a 12b-1 fee

of 1% annually. If you plan to sell the fund after 4 years, are Class A or Class B shares the better choice?

Assume a 10% annual return net of expenses before the 12b-1 fee is applied.

B. Class B

67. A mutual fund has total assets outstanding of $69 million. During the year the fund bought and sold

assets equal to $17.25 million. This fund's turnover rate was _____.

A. 25%

68. Which type of investment fund is commonly known to invest in options and futures in large scale?

B. Hedge funds

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

D. ETF values can diverge from NAV.

70. Harold has just taken his company public and owns a large quantity of restricted stock. For purposes of

diversification, what fund might he help create in order to diversify his holdings?

A. Commingled funds

71. Which of the following funds is most likely to have a debt ratio of 70% or higher?

D. REIT

72. _______ have become the main way for investors to speculate in precious metals.

D. Exchange-traded funds

73. From 1971 to 2010 the average return on the Wilshire 5000 Index was _________ the return of the

average mutual fund.

B. .8% higher than

74. An open-end fund has a NAV of $16.50 per share. The fund charges a 6% load. What is the offering

price?

C. $17.55

75. The offer price of an open-end fund is $18 and the fund is sold with a front-end load of 5%. What is the

fund's NAV?

B. $17.10 (calcolo: ($18)(1 - .05) = $17.10)

76. 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?

B. $55.44 (calcolo: ($50 million)(1.12)(1 - .01)/1 million = $55.44)

77. The assets of a mutual fund are $25 million. The liabilities are $4 million. If the fund has 700,000 shares

outstanding and pays a $3 dividend, what is the dividend yield?

B. 10%

78. Which of the following f