Mutual Funds

6885 WordsSep 22, 201328 Pages
Chapter 04 Mutual Funds and Other Investment Companies Multiple Choice Questions 1. Which one of the following invests in a portfolio that is fixed for the life of the fund? A. Mutual fund B. Money market fund C. Managed investment company D. Unit investment trust 2. ______ are partnerships of investors with portfolios that are larger than most individual investors but are still too small to warrant managing on a separate basis. A. Commingled funds B. Closed-end funds C. REITs D. Mutual funds 3. A __________ is a private investment pool open only to wealthy or institutional investors that is exempt from SEC regulation and can therefore pursue more speculative policies than mutual funds. A. commingled pool B. unit trust C.…show more content…
Gross Asset Value D. Total Asset Value 21. Net Asset Value is defined as ________________________. A. book value of assets divided by shares outstanding B. book value of assets minus liabilities divided by shares outstanding C. market value of assets divided by shares outstanding D. market value of assets minus liabilities divided by shares outstanding 22. Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the Net Asset Value (NAV) of these shares? A. $12.00 B. $9.00 C. $10.00 D. $1.00 23. Assume that you have recently purchased 100 shares in an investment company. Upon examining the balance sheet, you note the firm is reporting $225 million in assets, $30 million in liabilities, and 10 million shares outstanding. What is the Net Asset Value (NAV) of these shares? A. $25.50 B. $22.50 C. $19.50 D. $1.95 24. The Vanguard 500 Index Fund tracks the performance of the S&P 500. To do so the fund buys shares in each S&P 500 company __________. A. in proportion to the market value weight of the firm's equity in the S&P500 B. in proportion to the price weight of the stock in the S&P500 C. by purchasing an equal number of shares of each stock in the S&P 500 D. by purchasing an equal dollar amount of shares of each stock in the S&P500 25. Which of the following is not a type of managed investment company? A. Unit investment trusts B.

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