Quizzes

Quizzes

Investor Information

Mutual Funds

As the popularity of mutual funds has grown, so has the information about them. Take this quiz to determine if you understand mutual funds and how they work.

    1. Most mutual funds offer investors the benefits of diversification, professional management and liquidity.

       True

       False

    2. Open-end funds sell securities at a price based on their net asset value, and those shares are usually redeemed at their net asset value.

       True

       False

    3. The primary differences between closed-end funds and open-end funds are that open-end funds may be traded on an exchange and their price is determined like the price of any other security.

       True

       False

    4. Mutual funds that limit their investments to growth stocks are not pursuing a balanced investment approach.

       True

       False

    5. The greater the interest of investors in protecting capital, the more appropriate it would be to recommend mutual funds that have a growth objective.

       True

       False

    6. Securities firms are obligated to insure their mutual funds.

       True

       False

    7. Sales charges associated with the purchase and sale of mutual funds are commonly called "loads."

       True

       False

    8. The portfolio value of mutual funds seeking income are not subject to the risks associated with their investments.

       True

       False

    9. You do not pay capital gains taxes on a fund until the year in which you sell shares.

       True

       False

    10. Funds' investment objectives may include capital appreciation, current income or preservation of capital.

       True

       False

If you answered more than three incorrectly, you should consider learning more about mutual funds and how they can fit in your portfolio.

Answers:

 1 - T ; 2 -T;  3 - F; 4 - T; 5 - F; 6 - F; 7 - T; 8 - F; 9 - F; 10 - T

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