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Multiple Choice Quiz
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1
A mutual fund is owned by the investment advisory firm which manages the fund.
A)True
B)False
2
A contingent deferred sales charge is a back-end load which is imposed when shares of some mutual funds are sold.
A)True
B)False
3
Mutual funds are only permitted to invest in U.S. securities.
A)True
B)False
4
The net asset value (NAV) of a mutual fund is equal to the:
A)market value of the assets divided by the number of shares outstanding.
B)cost of the assets minus the liabilities.
C)market value of the assets minus the liabilities.
D)(cost of the assets minus the liabilities) divided by the number of shares outstanding.
E)(market value of the assets minus the liabilities) divided by the number of shares outstanding.
5
Each prospective investor in a mutual fund must be supplied with a(n):
A)trust certificate.
B)stock certificate.
C)tax report.
D)investment advisory report.
E)prospectus.
6
A fund has an offering price of $43.60 and a front-end load of 4.5 percent. What is the NAV?
A)$40.16
B)$41.64
C)$44.09
D)$45.78
E)$46.03
7
The Oliver Mutual Fund had average net assets of $111 million for the year. It bought $13 million worth of securities and sold $11 million worth. What is the fund's turnover rate?
A)8.54 times
B)8.67 times
C)9.25 times
D)10.00 times
E)0.0991 times
8
When an open-end fund closes, the:
A)fund is converting into a closed-end fund
B)final prices for the trading day are being calculated
C)fund ceases operations.
D)fund refuses to accept any new investors.
E)fund is finished trading for the day.
9
If you want to find a fund which invests only in companies which are environmentally friendly, you should refer to the category of funds which are classified as _____ funds.
A)income
B)index
C)social conscience
D)sector
E)emerging markets
10
When you redeem shares in an ETF, you:
A)receive the closing price for the trading day
B)must sell your shares to another shareholder.
C)do not incur any costs.
D)receive shares of stock.
E)receive a commission on the sale.





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