BCOR 2204 Quiz Practice Quizzes with Correct
Answers
We want WACC to be
low as possible
WACC
rate of financing for a project for that company
Asset classes (7 types)
Equities - stocks; bonds; mutual funds; exchange traded funds (ETFs); segregated funds; GICs -
guaranteed investment certificate; alternative investments
mutual funds
pools investors money to purchase a variety of securities
Net Asset Value (NAV)
(assets - liabilities) / shares outstanding
Types of investment funds
unit investment trusts; managed investment trusts (closed-end and open-end)
unit investment trusts
- fixed portfolio composition
- referred to as unmanaged
- no board of directors
- provides investors a way to invest in a pool of one particular type of
, asset (e.g., municipal bonds, corporate bonds, etc.)
- fees can be lower than those of managed funds
- have lost market share to mutual funds in recent years
open-end funds
most mutual funds
Are redeemed or issued on demand at their NAV (market value) when investors
want to purchase
Includes both mutual funds and exchange traded funds (ETFs)
The offering price may exceed NAV if the fund carries a load (sales commission)
close-end funds
number of shares are fixed and no new shares issued when investor purchases
fund
shares are traded on organized exchanges and can be purchased
through a broker
their prices can differ from NAV
Exchange traded funds (ETFs)
an investment vehicle that pools a group of securities (stocks/bonds) into a fund. It is traded like
an individual stock on an exchange; highly liquid; lower expense ratios or no fees
Money market funds (MMFs)
A pooled investment focused on short-term, high-quality, low risk debt securities (like T-bills,
municipal bonds, commercial paper); aims to maintain a stable NAV per share at $1
Answers
We want WACC to be
low as possible
WACC
rate of financing for a project for that company
Asset classes (7 types)
Equities - stocks; bonds; mutual funds; exchange traded funds (ETFs); segregated funds; GICs -
guaranteed investment certificate; alternative investments
mutual funds
pools investors money to purchase a variety of securities
Net Asset Value (NAV)
(assets - liabilities) / shares outstanding
Types of investment funds
unit investment trusts; managed investment trusts (closed-end and open-end)
unit investment trusts
- fixed portfolio composition
- referred to as unmanaged
- no board of directors
- provides investors a way to invest in a pool of one particular type of
, asset (e.g., municipal bonds, corporate bonds, etc.)
- fees can be lower than those of managed funds
- have lost market share to mutual funds in recent years
open-end funds
most mutual funds
Are redeemed or issued on demand at their NAV (market value) when investors
want to purchase
Includes both mutual funds and exchange traded funds (ETFs)
The offering price may exceed NAV if the fund carries a load (sales commission)
close-end funds
number of shares are fixed and no new shares issued when investor purchases
fund
shares are traded on organized exchanges and can be purchased
through a broker
their prices can differ from NAV
Exchange traded funds (ETFs)
an investment vehicle that pools a group of securities (stocks/bonds) into a fund. It is traded like
an individual stock on an exchange; highly liquid; lower expense ratios or no fees
Money market funds (MMFs)
A pooled investment focused on short-term, high-quality, low risk debt securities (like T-bills,
municipal bonds, commercial paper); aims to maintain a stable NAV per share at $1
