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51.Which one of the following is true about growth funds?

a.The objective of growth funds is to invest in industries and companies that are not mature and are still experiencing sizable growth. 

b.Investors looking for a higher return and a moderate risk are attracted to such funds. 

c.Focus is on capital appreciation rather than steady income, so investors’ outlook needs to be long-term.

d.All of the above are true.

 

52.Which of the following is true about growth & income funds?

a.They seek a balance between capital gains and current income.

b.They mostly invest in highly rated companies’ stock.

c.They are ideal for investors who are looking for some income, but would also want to invest in growth stocks.

d.All of the above is true.

 

53.Which of the following can trade on national exchanges?

a.MMMF

b.open-end investment company

c.no-load mutual fund

d.Exchange-Traded Funds(ETF)

 

54.Money market mutual funds (MMMFs) became popular in the 1970s because

a.MMMF balances were insured by FDIC, unlike bank deposits

b.MMMF were allowed to pay market rates on their balances, while commercial banks faced interest rate ceilings.

c.MMMF balances were more liquid than any bank deposits.

d.All of the above

 

55.An open end mutual fund owns 1500 share of Crispy Creme priced at $12.  The fund also               owns 1000 shares of Bem & Jarry's priced at $43, and 2000 shares of Pepsi priced at $50.                The fund itself has 3500 of its own shares outstanding.  What is the NAV of a fund's               share?

a.$66

b.$56

c.$46

d.$36

e.$26

 

56.You have $200,000 to invest in a mutual fund with a NAV = $70.  This fund has a 4% of               front load, a 1% of management fee and a 0.25% of 12b-1 fee.  Assume that the               management and 12b-1 fees are charged based on year-end asset value.  The gross annual               return on the fund's shares was 9%.  What was your net annual rate of return to the               nearest basis point?

a.3.33%

b.7.64%

c.6.25%

d.4.52%

e.4.64%

 

57.You have $15,000 to invest in a mutual fund.  You choose a fund with a 3.5% front load,               a 1.75% management fee and a 0.5% 12b-1 fee.  Assume that the management and 12b-1               fees are charged on year end assets for simplicity.  The gross annual return on the fund's               shares was 12.50%.  What was your net annual rate of return to the nearest basis point?

a.9.97%

b.8.25%

c.6.12%

d.5.42%

e.4.56%

 

 

 

 

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