Question 1

Which of the following fund types is not registered with the securities exchange commissions?

Accepted Answer

A)   Exchange traded funds.
B)   Money market funds.
C)   Open-end funds.
D)   Closed-end funds.
E)   Hedge funds.F) C) and D)
G) None of the above

Question 2

Suppose you are planning to invest in a mutual fund for the next thirty-five years. The expense you should be most concerned with is the:

Accepted Answer

A)   management fee.
B)   front-end load.
C)   deferred sales charge.
D)   exchange fee.
E)   back-end load.F) A) and E)
G) A) and B)

Question 3

The ABC Fund is a closed-end fund founded in 1998 at which time it was fully subscribed. You want to invest $5,000 in this fund today. You need to have purchased your shares

Accepted Answer

A)   In a private transaction
B)   Under the agreement made in 1998
C)   Directly from the fund
D)   From a relative
E)   From another shareholderF) A) and C)
G) All of the above

Question 4

Which of the following mutual funds is likely to have the highest dividend yield?

Accepted Answer

A)   Equity income fund.
B)   Capital appreciation fund.
C)   Growth and income fund.
D)   Small company stock fund.
E)   Growth fund.F) None of the above
G) A) and B)

Question 5

A mutual fund has sales during the year of $86 million and purchases of $94 million. If the average daily assets of the fund were $110 million, what was the fund turnover?

Accepted Answer

A)   0.82
B)   0.71
C)   0.78
D)   0.74
E)   0.85F) C) and E)
G) D) and E)

Question 6

Investment in no-load mutual fund shares

Accepted Answer

A)   needs a brokerage service
B)   requires a commission payment
C)   is identical to investments with load charges
D)   can be made directly through the investment company
E)   None of the aboveF) B) and E)
G) None of the above

Question 7

A(n)  ___________ is a non-corporate form of business organization holding debt and equity of an underlying business and distributing all income generated back to unit-holders.

Accepted Answer

A)   Co-op trust
B)   Income trust
C)   Labor-sponsored fund
D)   Tax-free income fund
E)   Guaranteed trustF) A) and E)
G) None of the above

Question 8

A deferred sales charge is also know as a(n) :

Accepted Answer

A)   offering price.
B)   special fee.
C)   back-end load.
D)   front-end load.
E)   exchange fee.F) B) and E)
G) C) and D)

Question 9

___________ is an index fund holding a diversified portfolio of securities, priced and traded on public exchanges.

Accepted Answer

A)   NAV
B)   RRSP
C)   ETF
D)   GDP
E)   EVAF) C) and E)
G) C) and D)

Question 10

A mutual fund has 4,000 shares of Stock A at a price of $45 and 6,000 shares of Stock B at a price of $35. If the fund has 20,000 shares outstanding, what is the NAV of the fund? Assume there are no liabilities for this fund.

Accepted Answer

A)   $18.75
B)   $19.50
C)   $17.10
D)   $21.10
E)   $20.65F) B) and E)
G) A) and D)

Question 11

A mutual fund has 40,000 shares of Stock A at a price of $38 and 60,000 shares of Stock B at a price of $46. If the fund has 95,000 shares outstanding and total liabilities of $130,000, what is the NAV of the fund?

Accepted Answer

A)   $42.74
B)   $43.68
C)   $44.31
D)   $45.05
E)   $46.13F) A) and B)
G) D) and E)

Question 12

The net asset value of a money market mutual fund

Accepted Answer

A)   Generally fluctuates on a daily basis
B)   Is guaranteed to be $10
C)   Can be equal to or greater than $10, but not less than $10
D)   Can fall below $10
E)   Is protected by the CDICF) B) and D)
G) All of the above

Question 13

A mutual fund has 2,000 shares of stock at a price of $70 and 6,000 shares of another stock at a price of $30. If the fund has an NAV of $17.10, how many shares of the mutual fund are outstanding?

Accepted Answer

A)   8,000
B)   16,242
C)   18,713
D)   17,626
E)   19,853F) C) and D)
G) A) and C)

Question 14

A mutual fund had assets of $210 million at the beginning of the year and $240 million at the end of the year. If the fund has a management fee of 0.75 percent, how much did the fund's management receive in fees during the year?

Accepted Answer

A)   $1,704,000
B)   $1,575,000
C)   $1,430,000
D)   $1,800,000
E)   $1,650,000F) None of the above
G) A) and B)

Question 15

A mutual fund with a 4.5 percent front-end load has a NAV of $74.53. What is the offering price of the fund?

Accepted Answer

A)   $78.04
B)   $78.39
C)   $78.97
D)   $71.18
E)   $79.27F) A) and B)
G) A) and C)

Question 16

A company that pools funds of individual investors and invests them on a group basis is called a(n)  ___________ company.

Accepted Answer

A)   Trust
B)   Investment
C)   Brokerage
D)   Mutual
E)   FinancialF) A) and D)
G) A) and E)

Question 17

Which of the following fund types often trades at a discount or premium to its NAV?

Accepted Answer

A)   Index funds.
B)   Money market funds.
C)   Open-end funds.
D)   Closed-end funds.
E)   Hedge funds.F) B) and E)
G) C) and D)

Question 18

Which of the following fees and expenses is not directly reported to shareholders?

Accepted Answer

A)   Trading costs.
B)   Management fees.
C)   Special fees.
D)   Deferred sales charge.
E)   Switch fees.F) B) and E)
G) All of the above

Question 19

You have purchased shares of the AGF Stock Fund for just a week. However, you decide you want to invest in a bond fund so you move your investment to the AGF Bond Fund. If the company charges you a fee of $30, this charge is considered as a(n) :

Accepted Answer

A)   management fee.
B)   soft dollar expense.
C)   front-end load.
D)   deferred sales charge.
E)   short-term trading fee.F) A) and E)
G) None of the above

Question 20

A closed-end fund has total assets of $270 million and liabilities of $640,000. There are 25 million shares outstanding. What is the premium or discount on the fund if the shares are currently selling for $9.80 each?

Accepted Answer

A)   6.48% discount
B)   7.64% discount
C)   9.01% discount
D)   6.34% premium
E)   8.04% premiumF) A) and E)
G) B) and D)

Exam 5: Mutual Funds

The ABC Fund is a closed-end fund founded in 1998 at which time it was fully subscribed. You want to invest $5,000 in this fund today. You need to have purchased your shares

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A mutual fund has 2,000 shares of stock at a price of $70 and 6,000 shares of another stock at a price of $30. If the fund has an NAV of $17.10, how many shares of the mutual fund are outstanding?

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A company that pools funds of individual investors and invests them on a group basis is called a(n) ___________ company.

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A mutual fund had assets of $210 million at the beginning of the year and $240 million at the end of the year. If the fund has a management fee of 0.75 percent, how much did the fund's management receive in fees during the year?

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A deferred sales charge is also know as a(n) :

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A mutual fund has 40,000 shares of Stock A at a price of $38 and 60,000 shares of Stock B at a price of $46. If the fund has 95,000 shares outstanding and total liabilities of $130,000, what is the NAV of the fund?

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Which of the following fund types is not registered with the securities exchange commissions?

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Which of the following fund types often trades at a discount or premium to its NAV?

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Investment in no-load mutual fund shares

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Which of the following fees and expenses is not directly reported to shareholders?

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You have purchased shares of the AGF Stock Fund for just a week. However, you decide you want to invest in a bond fund so you move your investment to the AGF Bond Fund. If the company charges you a fee of $30, this charge is considered as a(n) :

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A mutual fund has sales during the year of $86 million and purchases of $94 million. If the average daily assets of the fund were $110 million, what was the fund turnover?

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Which of the following mutual funds is likely to have the highest dividend yield?

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A closed-end fund has total assets of $270 million and liabilities of $640,000. There are 25 million shares outstanding. What is the premium or discount on the fund if the shares are currently selling for $9.80 each?

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A mutual fund with a 4.5 percent front-end load has a NAV of $74.53. What is the offering price of the fund?

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The net asset value of a money market mutual fund

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A mutual fund has 4,000 shares of Stock A at a price of $45 and 6,000 shares of Stock B at a price of $35. If the fund has 20,000 shares outstanding, what is the NAV of the fund? Assume there are no liabilities for this fund.

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Suppose you are planning to invest in a mutual fund for the next thirty-five years. The expense you should be most concerned with is the:

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A(n) ___________ is a non-corporate form of business organization holding debt and equity of an underlying business and distributing all income generated back to unit-holders.

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___________ is an index fund holding a diversified portfolio of securities, priced and traded on public exchanges.

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