Chapter 16 – Investing in Mutual Funds
102. (p. 546) Noelle Simon is buying shares in a mutual fund that only invests in companies
located in Latin America. What type of mutual fund is this?
103. (p. 546) Tisha Elmwood is buying shares in a mutual fund that avoids companies that do
harm to people, animals, and the environment. What type of mutual fund is this?
104. (p. 546) Christopher Fishbone is buying shares in a mutual fund that invests in companies
that are all within the same industry. What type of mutual fund is he buying?
Chapter 16 – Investing in Mutual Funds
105. (p. 546) Sloan Richards is buying shares in a mutual fund that invests in companies that
have a market capitalization of less than $2 billion. What type of mutual fund is this?
106. (p. 549) Nathan Fuller is buying shares in a mutual fund that invests in the same companies
as those found in the S&P 500 and in roughly the same proportion. What type of mutual fund
is he buying?
107. (p. 545) Louise Prescott is buying shares in a mutual fund that invests in companies
expecting higher than average revenues and earnings growth. What type of mutual fund is she
buying?
Chapter 16 – Investing in Mutual Funds
108. (p. 546) Which type of mutual fund invests primarily in high-yield, high-risk corporate
bonds?
109. (p. 546) Which type of mutual fund invests primarily in corporate bonds with maturities
between 5 and 10 years?
110. (p. 546) If you are seeking federally tax-exempt income, which type of mutual fund should
you purchase?
Chapter 16 – Investing in Mutual Funds
111. (p. 546) Marcie is seeking interest income but wants to ensure that her investment is as safe
as possible. Which type of mutual fund best fits her requirements? (Change as shown.)
112. (p. 546) Caroline Campbell is buying shares in a mutual fund that invests in bonds offered
by foreign companies and governments. What type of mutual fund is she buying?
113. (p. 554) Which of the following would be found in a mutual fund’s prospectus?
Chapter 16 – Investing in Mutual Funds
114. (p. 557) Which of the following is a disadvantage associated with purchasing a mutual
fund?
115. (p. 557) Which of the following is an advantage associated with purchasing a mutual fund?
116. (p. 560) Sharon Taylor uses all of her dividend income and capital gain distributions to
purchase additional shares in her mutual fund. Which one of the following plans is she using?
Chapter 16 – Investing in Mutual Funds
117. (p. 543) Will Hopkins is getting ready to purchase shares in a mutual fund. He will have to
pay an upfront sales commission to purchase these shares. What type of shares is he buying?
118. (p. 543) Melanie Davis is getting ready to purchase shares in a mutual fund. The fund will
charge her a sales charge only if she redeems her shares within a stated period of time. What
type of shares is she buying?
119. (p. 537) Which one of the following is true with respect to closed-end funds?
Chapter 16 – Investing in Mutual Funds
120. (p. 536) Which of the following is true?
121. (p. 560) Which of the following options can a mutual fund investor use to purchase shares
in an open-end fund?
122. (p. 539) The Capitalist Mutual Fund’s net asset value is $26.25. The fund has liabilities of
$3 million and 1,600,000 shares have been issued. What is the value of the fund’s portfolio?
Chapter 16 – Investing in Mutual Funds
123. (p. 554) The turnover ratio of a mutual fund measures the:
124. (p. 536) A mutual fund:
125. (p. 538) A closed end-fund is:
Chapter 16 – Investing in Mutual Funds
126. (p. 542) Contingent deferred sales loads may also be referred to as ____ loads.
127. (p. 542) Contingent deferred sales loads generally:
128. (p. 550) According to The Investment Company website, the percentage of investors who
purchased their first fund through a retirement plan is:
Chapter 16 – Investing in Mutual Funds
129. (p. 536-537) Why do investors purchase mutual funds instead of purchasing stocks, bonds, or
other investments on their own?
130. (p. 541-542) Explain the difference between a load fund and a no-load fund. From a
performance standpoint, is there a significant difference between mutual funds that charge
commissions and those that do not?
Chapter 16 – Investing in Mutual Funds
131. (p. 548-550) Cindy and John Appleby just inherited $30,000 and would like to invest the
money in a conservative mutual fund. Since they have never invested in mutual funds, they
ask for your help. In your own words, describe the sources of information available for
evaluating a mutual fund investment.
132. (p. 559-561) Describe either the purchase options or withdrawal options that can be used to
invest in or withdraw money from the investment company that sponsors an open- end mutual
fund.
Chapter 16 – Investing in Mutual Funds
133. (p. 557) Your parents are considering the purchase of shares in a mutual fund. Discuss three
advantages and three disadvantages of mutual fund investing that you believe are important
for potential investors to consider.