FREE S-12 Investment Funds Questions and Answers
What is the primary feature of a mutual fund?
Correct!
Wrong!
Mutual funds are managed by professionals and provide investors access to a diversified portfolio.
What is an Exchange-Traded Fund (ETF)?
Correct!
Wrong!
ETFs are traded throughout the day on exchanges and typically track an index.
What is a key characteristic of a closed-end fund?
Correct!
Wrong!
Closed-end funds issue a fixed number of shares and trade on exchanges at prices determined by supply and demand.
What does a mutual fund’s expense ratio represent?
Correct!
Wrong!
The expense ratio covers management fees and other operational costs, reducing investor returns.
What is a no-load mutual fund?
Correct!
Wrong!
No-load funds allow investors to buy and sell shares without incurring commission fees.