Which of the Following Is True About Mutual Funds

B Investors do not have to pay taxes on gains from mutual funds. A A mutual fund is usually run by an investment company.

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The fund manager is ultimately responsible for a funds success.

. Hedge fund managers can pursue strategies not available to mutual funds such as short selling heavy use of derivatives and leverage d. I III and IV C. As the statement given in the question that mutual funds provide the investor a chance to diversify without having to buy the shares in numerous corporations.

Because an index fund is a mirror image of a specific index the dollar value of a share in an index fund increases when the index increases. The correct answer is 91 days. B Although many mutual funds have grown substantially over time their expense ratios have generally increased over time.

Front - end loads. A Mutual funds cannot be bought in retirement accounts. I only II only both I and II neither I nor 11.

D You can invest in mutual funds only when you pass your 18th birthday. Differences between hedge funds and mutual funds are that a. Hedge funds are only subject to minimal SEC regulation b.

An investment company sponsoring a mutual fund must furnish shareholders a prospectus each year. C Mutual funds are typically less safe than Certificates of Deposit. III Most hold money market securities as well as stock.

Capital gain distributions are taxed when you sell your shares. I II and III E. Which of the following is true about mutual funds and taxes.

An index fund is the fund with the highest expenses payable by investors. II They may hold fixed-income securities as well as stock. Which of the following is true regarding equity mutual funds.

Which of the following statements is not true about small-cap mutual funds. Active funds generally give higher returns than passive funds. I They invest primarily in stock.

C the two types of funds perform about the same considering the fees. Investment companies are required to send each shareholder a year-end statement that specifies how much each received in dividends and capital gain distributions. Liquid funds are a type of mutual fund that invests in securities with a residual maturity of up to 91 days.

IV Two types of equity funds are income funds and growth funds. Most mutual funds generally give higher returns than broad stock indexes. They invest in commercial paper CDs and repurchase agreements and they usually offer check - writing privileges.

Hedge funds are typically open only to wealthy or institutional investors c. B no-load funds perform at least as well as load funds even when the fees are ignored. Each of the following is true of Mutual Funds EXCEPTAnswer The NAV is the total value of stock held by the fund divided by the number of outstanding shares in themutual fund.

Income dividends are taxed quarterly. Investment is not tied up for a long time as liquid funds do not have a lock-in period. Mutual funds are actively managed while index funds are passively managed.

Mutual funds trade directly on stock exchanges while exchange-traded funds are purchased from a financial broker. I and IV B. Return on investment in.

Management fees and other expenses of mutual funds may include. Regarding load and no-load mutual funds A load funds usually outperform no-load funds. Which of the following statements is not true about small-cap mutual funds.

C For each mutual fund all expenses charged and reflected in the expense ratio are always valid. I II and IV D. They are highly leveraged and risky.

All of the options are true. What is true about mutual funds. Which of the following is TRUE of mutual funds.

Funds can be classified as load or no-load funds. Finance questions and answers. Is absolutely true and correct statement since no shares are to be purchased directly by the investors mutual funds do the job for us and give us handsome returns on the invested amounts.

Index funds track major market indexes while exchange-traded funds do not. Small-cap funds derive more of their returns from capital gains rather than dividends Small-cap funds strive to provide better returns than those of blue chip equity funds Small-cap funds derive more of their returns from dividends rather than capital gains Small-cap funds can expose investors to. Small-cap funds derive more of their returns from capital gains rather than dividends Small-cap funds strive to provide better returns than those of blue chip equity funds Small-cap funds derive more of their returns from dividends rather.

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