PT Ch07

PT Ch07 - Exam Name_ MULTIPLE CHOICE. Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The open - end aspect of mutual funds is ________; that is, investors invest funds directly in or withdraw funds from the mutual fund. The open - end aspect of ETFs is ________ in that the investors buy the ETF in a closed - end manner like closed - end funds and then the authorized participant ________ between the ETF and the underlying portfolio, providing the indirect open - end aspect of the ETF. 1) A) direct; straight; arbitrages B) direct; indirect; arbitrages C) direct; straight; trades D) indirect; direct; trades 2) An investment company is a financial intermediary in that it pools the funds of ________ and uses these funds to buy ________. 2) A) individual investors; individual securities B) institutional investors; portfolios of securities C) individual investors; portfolios of securities D) institutional investors; individual securities 3) Recent SEC priorities directly affect mutual funds. Which of the below is NOT one of these? 3) A) Disclosing portfolio practices such as "portfolio dressing" B) More accurate and consistent reporting of investment performance. C) More complete reporting of fees, including fees in dollars - and - cents terms as well as in percentage terms. D) Reporting after - tax fund returns 4) Two decades ago, sales charges on mutual funds were related to the manner of distribution. Which of the below types characterize the two types of distribution? 4) A) sales force and indirect B) sales force and wholesale C) sales force and direct D) wholesale and indirect 5) ________, commonly referred to simply as mutual funds, are portfolios of securities, mainly stocks, bonds, and money market instruments. 5) A) Closed - end funds B) Open - end funds C) Unit - end funds D) Unit trusts 6) A rule called " ________" or "Plain English Disclosure" was enacted on October 1, 1998, to improve the readability of the fund prospectus and other fund documents. 6) A) prospectus overview B) prospectus generalization C) prospectus modification D) prospectus simplification 7) The shares of a ________ are very similar to the shares of common stock of a corporation in that the new shares are initially issued by an underwriter for the fund and after the new issue, the number of shares remains constant. 7) A) opened - end fund B) closed - end funds C) unit - end funds D) open - end trusts 1
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8) There are two types of costs borne by investors in mutual funds: the first cost is the shareholder fee and the second cost is the annual fund operating expense. Which of the below descriptions relate to the second cost? 8) A) the charge based on the way the fund is sold or distributed B) the expense ratio, which covers the fund's expenses and occurs on all funds C) the charge that covers the purchase, redemption, or exchange D) the "one - time" charge debited to the investor for a specific transaction 9) Many high - net - worth individuals object to using mutual funds because of the individual
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PT Ch07 - Exam Name_ MULTIPLE CHOICE. Choose the one...

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