Chapter 16 – Investing in Mutual Funds
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67. (p. 545) A mutual fund that invests in common stocks of rapidly growing corporations with
higher-than-average revenue and earnings growth is called a(n) ____________ fund.
68. (p. 545) A mutual fund that invests in stocks issued by companies with a long history of
paying dividends is called a(n) ____________ fund.
69. (p. 546) A mutual fund that invests in investment-grade corporate debt with maturities
between 5 and 10 years is called a(n) ____________ fund.
Chapter 16 – Investing in Mutual Funds
70. (p. 546) A mutual fund that invests in the common stocks of companies in the same industry
is called a(n) ____________ fund.
71. (p. 545) A mutual fund that only invests in companies outside the United States is called a(n)
____________ fund.
72. (p. 546) A municipal bond fund:
Chapter 16 – Investing in Mutual Funds
73. (p. 546) Last month Nellie Jacobson’s divorce became final. As part of the settlement, she
received $150,000. She would like to invest in mutual funds, but since she is 62 years old, she
is concerned with the safety of her “nest egg.” Which of the following mutual funds would
you recommend?
74. (p. 547) Martin Campbell wants to invest in mutual funds, but is also worried about
75. (p. 547) When one investment company manages a group of mutual funds, it is called a(n):
Chapter 16 – Investing in Mutual Funds
76. (p. 547) Henrietta Marston plans to retire in the year 2050. She is considering a fund that will
be more aggressive now and become more conservative as she approaches retirement. Which
of the following funds would you recommend to her?
77. (p. 547) Which one of the following funds would be considered the safest investment?
78. (p. 548) Which one of the following statements is false?
Chapter 16 – Investing in Mutual Funds
79. (p. 548) Which one of the following statements is true?
80. (p. 549) Which one of the following statements is false?
81. (p. 549) The typical expense ratio for an index fund is:
Chapter 16 – Investing in Mutual Funds
82. (p. 551) Which one of the following statements is false?
83. (p. 552) In a newspaper quotation, which one of the following letters would indicate if a
mutual fund has a redemption charge?
84. (p. 552) In a newspaper quotation, which one of the following letters would indicate if a
mutual fund has a 12b-1 fee?
Chapter 16 – Investing in Mutual Funds
85. (p. 552) An investment company sponsoring a mutual fund must give potential investors
a(n):
86. (p. 554) As a shareholder in a mutual fund, you should receive a(n):
87. (p. 555) Which one of the following publications does not provide readers with information
about mutual funds?
Chapter 16 – Investing in Mutual Funds
88. (p. 558) Which of the following statements is false?
89. (p. 558) During 2008, Lincoln Masters received income dividends of $850 and capital gain
distributions of $540. Based on this information:
90. (p. 558) Income dividends and capital gain distributions are:
Chapter 16 – Investing in Mutual Funds
91. (p. 560) The most popular and least complicated method of purchasing shares in an open-
end mutual fund is through a:
92. (p. 560) A mutual fund that requires investors to make regular purchases over a specified
period of time is called a:
93. (p. 560) Because of up front commission charges, many financial experts and government
agencies are critical of:
Chapter 16 – Investing in Mutual Funds
94. (p. 560) If an investor uses a reinvestment plan to invest income dividends and capital- gain
distributions:
95. (p. 561) Which one of the following is not a withdrawal option for a mutual fund?
96. (p. 540-541) Which of the following is an advantage of an exchange traded fund (ETF)?
Chapter 16 – Investing in Mutual Funds
97. (p. 541) Tiffany Scott puts $10,000 into a load mutual fund. She knows that her up-front
sales commission is 6%. How much of her money actually goes to buy shares in the mutual
fund?
98. (p. 545) Joseph Carter is buying shares in a mutual fund that is investing in stocks all over
the world, including the United States. What type of mutual fund is this?
Chapter 16 – Investing in Mutual Funds
99. (p. 545) Conrad Maestro is buying shares in a mutual fund that seeks rapid price appreciation
by purchasing stocks whose price is expected to increase dramatically in a short period of
time. What type of mutual fund is he purchasing?
100. (p. 545) Phyllis Payne is buying shares in a mutual fund that invests in companies with a
long history of paying a dividend. What type of mutual fund is she buying?
101. (p. 545) Norma Rose is buying shares in a mutual fund that only invests in companies from
countries other than the United States. What type of mutual is she buying?