1. Most mutual funds offer investors the benefits of diversification, professional management and liquidity.
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.
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.
4. Mutual funds that limit their investments to growth stocks are not pursuing a balanced investment approach.
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.
6. Securities firms are obligated to insure their mutual funds.
7. Sales charges associated with the purchase and sale of mutual funds are commonly called "loads."
8. The portfolio value of mutual funds seeking income are not subject to the risks associated with their investments.
9. You do not pay capital gains taxes on a fund until the year in which you sell shares.
10. Funds' investment objectives may include capital appreciation, current income or preservation of capital.