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Investment Funds Flashcards

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Read the first 5 Investment Funds flashcards as text

  1. What is the primary feature of a mutual fund?

    Answer: It pools money from investors to invest in a diversified portfolio.

    Mutual funds are managed by professionals and provide investors access to a diversified portfolio.

  2. What is an Exchange-Traded Fund (ETF)?

    Answer: A fund traded on an exchange like a stock

    ETFs are traded throughout the day on exchanges and typically track an index.

  3. What is a key characteristic of a closed-end fund?

    Answer: It is traded on exchanges at market prices.

    Closed-end funds issue a fixed number of shares and trade on exchanges at prices determined by supply and demand.

  4. What does a mutual fund’s expense ratio represent?

    Answer: The fund's annual operating expenses as a percentage of its assets

    The expense ratio covers management fees and other operational costs, reducing investor returns.

  5. What is a no-load mutual fund?

    Answer: A fund that charges no sales fees

    No-load funds allow investors to buy and sell shares without incurring commission fees.

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Sources & references

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  1. nyc-business.nyc.gov — Fees, retake policy, score validity · verified Oct 2026
  2. nyc.gov — Test delivery, exam format, passing score, registration deadline, renewal, score release, time limit · verified Oct 2026