Ex3fin3523fa10 - Exam 3 Dr Romer Finance 3523 Fall 2010...

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Exam 3 Dr Romer Finance 3523 Fall 2010 Name ________________________________ Choose the best answer (2 points). Max possible, 100 mc + 16 bonus = 116. Chapters 13, 17-20 1. Services investors may expect to receive from a long term bond mutual fund include I. Commission free reinvestment opportunities II. Periodic automatic withdrawals III. Free switching between funds within the same family IV. Tax free reinvestment of dividends and capital gains A) I and III only B) II and IV only C) II, III and IV only D) I, II and III only E) I, II, II and IV 2. Hedge funds charge expense fees and performance fees. The average performance fee on hedge funds is ____. A) 5% B) 10% C) 15% D) 20% E) 25% 3. ETFs are a direct competitor to ___________. A) hedge funds B) money market mutual funds C) REITS D) index funds E) market neutral funds 4. Money market mutual funds (MMMFs) have caused disintermediation at banks at times. This is because MMMFs A) Sometimes pay higher interest rates than bank deposits B) Are less risky than bank deposits C) Are now federally insured, like bank deposits D) Offer guaranteed rates of return E) None of the above 5. By type of fund, there are more _____ funds than any other. A) Equity B) Bond C) Taxable money market D) Tax exempt money market E) Hybrid 6. A money market mutual fund's total assets increase from $100 to $105 when the fund has 100 shares outstanding. Which of the following will happen? A) The fund's NAV will rise from $100 to $105 B) The fund's NAV per share will rise from $1 to $1.05 C) The fund will issue a total of 5 new shares D) The fund's NAV will fall 5% E) The fund will close to new investors 7. You have $15,000 to invest in a mutual fund. You choose a fund with a 3.5% front load, a 1.75% management fee and a 0.5% 12b-1 fee. Assume that the management and 12b-1 fees are charged on year end assets for simplicity. The gross annual return on the fund's shares was 12.50%. What was your net annual rate of return to the nearest basis point? A) 9.97% B) 6.12% C) 9.25% D) 5.42% E) 8.56%
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8. You wish to invest $17,445 in a mutual fund with a NAV of $26.03. The fund charges a front end load of 4.50%. How many fund shares will you receive? A) 595 B) 640 C) 616 D) 668 E) 628 9. You are considering purchasing shares in a typical mutual fund that has three classes of shares outstanding: Class A, Class B and Class C. If you purchase Class A shares you will pay A) A back end load and no 12b-1 fees B) A front end load and a small 12b-1 fee C) No front end load but a back end load D) A back end load and full 12b-1 fees E) A front end load and full 2b-1 fees 10. You are considering purchasing shares in a typical mutual fund that has three classes of shares outstanding: Class A, Class B and Class C. If you purchase Class C shares you will pay A) A back end load and no 12b-1 fees B) A front end load and a small 12b-1 fee, but eventually your shares will be converted to Class A shares C) No front end load but a back end load D) A back end load and full 12b-1 fees
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This note was uploaded on 04/03/2011 for the course FIN 3523 taught by Professor Sam during the Spring '11 term at University of Texas at Dallas, Richardson.

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Ex3fin3523fa10 - Exam 3 Dr Romer Finance 3523 Fall 2010...

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