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Multiple Choice Quiz
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1

Because the load fee is paid in advance an investor who pays the same amount into a load fund has less money available to purchase shares in the fund.
A)True.
B)False.
2

There is only one objective for all mutual funds.
A)True.
B)False.
3

Once you have invested in a mutual fund you should receive a copy of their annual report each year. It should contain detailed financial information about the mutual fund you have invested in.
A)True.
B)False.
4

One of the major reasons investors purchase mutual funds is because they reduce interest rate risk.
A)True.
B)False.
5

What type of mutual fund invests in smaller, less well-known companies with total capitalization under $500 million?
A)A global stock mutual fund
B)An aggressive growth stock mutual fund
C)A small-cap mutual fund
D)An index mutual fund
E)All of the above
6

You buy 250 shares of a mutual fund for $40 per share. During the year you earn $.63 per share in income dividends and also earn $.88 per share in capital gains distributions. You sell the shares of the mutual fund at the end of the year for $45 per share. What is your dollar amount of total return you earned during the year?
A)$1250
B)$377.50
C)$1627.50
D)$250
E)None of the above
7

What type of mutual fund invests in investment grade corporate bonds with greater than 10 years to maturity?
A)Municipal bond fund
B)Long-term corporate bond fund
C)Short-term government bond fund
D)High-yield bond fund
E)None of the above
8

A(n) ___________ is a company that for a management fee invests the pooled money of small investors in securities that fit the stated investment goals of the fund.
A)Utility company
B)Investment company
C)Corporation
D)Pool company
E)None of the above
9

A(n) ___________ is a mutual fund where the investor pays no sales fee. You must contact the investment company directly to purchase this type of fund.
A)Closed-ended mutual fund
B)Open-ended mutual fund
C)Load mutual fund
D)No-load mutual fund
E)None of the above
10

One of the ways you can earn a return on a mutual find is ___________. This occurs when the investor buys the fund at a low price and sells it at a higher price.
A)Income dividends
B)Capital gain distributions
C)Capital gains
D)Capital losses
E)None of the above





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