Investment Jobs Mutual Fund Investment 3

Question 1

How does a closed-end fund differ from an open-end fund?

Accepted Answer

It trades on an exchange at a market price that can differ from NAV

Answer

It has unlimited shares

Answer

It cannot hold stocks

Answer

It is always tax-exempt

Question 2

What is a money market mutual fund designed to do?

Accepted Answer

Preserve capital and provide liquidity with low risk

Answer

Maximize aggressive growth

Answer

Invest only in foreign equities

Answer

Track a commodity index

Question 3

A back-end load (contingent deferred sales charge) is paid when?

Accepted Answer

When shares are sold, often declining over time

Answer

At purchase

Answer

When reinvesting dividends

Answer

Annually regardless of activity

Question 4

What is a balanced fund?

Accepted Answer

A fund mixing stocks and bonds in one portfolio

Answer

A fund holding only Treasury bills

Answer

A fund that only invests internationally

Answer

A fund with no management fees

Question 5

Why might an index fund have a lower expense ratio than an active fund?

Accepted Answer

It requires less research and trading to track an index

Answer

It pays higher dividends

Answer

It is government subsidized

Answer

It holds fewer total securities

Question 6

What does a fund's prospectus primarily provide to investors?

Accepted Answer

Disclosure of objectives, risks, fees, and performance

Answer

A guarantee of returns

Answer

A list of all other shareholders

Answer

Tax advice for the year

Question 7

When are mutual fund shares typically priced each day?

Accepted Answer

Once after the market closes (forward pricing)

Answer

Every minute during trading hours

Answer

Only on Mondays

Answer

At the moment the order is placed