Investment Jobs Mutual Fund Investment 2

Question 1

What is the Net Asset Value (NAV) of a mutual fund?

Accepted Answer

Total assets minus liabilities divided by shares outstanding

Answer

The total marketing fees charged annually

Answer

The fund's highest price in the past year

Answer

The dividend paid per share each quarter

Question 2

An open-end mutual fund issues shares in what manner?

Accepted Answer

Continuously, creating new shares as investors buy in

Answer

A fixed number set at the IPO

Answer

Only through secondary market trading

Answer

Once per year on the ex-dividend date

Question 3

What does the expense ratio of a mutual fund represent?

Accepted Answer

The annual operating costs as a percentage of assets

Answer

The fund's annual return

Answer

The maximum sales load allowed

Answer

The capital gains tax owed by investors

Question 4

A front-end load is a fee charged when?

Accepted Answer

At the time shares are purchased

Answer

When shares are redeemed

Answer

When dividends are reinvested

Answer

When the fund underperforms its benchmark

Question 5

Which fund type is professionally managed to beat a benchmark index?

Accepted Answer

An actively managed fund

Answer

An index fund

Answer

A money market fund

Answer

An exchange-traded note

Question 6

What is a key advantage of a mutual fund for small investors?

Accepted Answer

Instant diversification with a small investment

Answer

Guaranteed returns

Answer

Exemption from all fees

Answer

No exposure to market risk

Question 7

A 12b-1 fee covers what fund expense?

Accepted Answer

Distribution and marketing costs

Answer

Portfolio manager salaries only

Answer

Custodial bank charges

Answer

Capital gains distributions