Wealth Management Exam #2 questions
with 100% complete solutions
Mutual fund expense ratios include all of the following except? - correct answer ✔✔Investment
Losses
Which of the following is not an investment company? - correct answer ✔✔CMO
Which of the following statements concerning a unit Investment Trust is correct? - correct
answer ✔✔It has an unmanaged portfolio
Open end funds and closed-end funds are similar except for: - correct answer ✔✔Capitalization
Kevin is considering a mutual fund that invests only in technology companies. What is the best
term for this type of fund? - correct answer ✔✔sector fund
There is more money invested in bond funds than equity funds. - correct answer ✔✔False
Actively managed funds should have higher expense ratios than passively managed funds. -
correct answer ✔✔True
Market risk is the primary risk for equity mutual funds. - correct answer ✔✔True
Mutual funds can be sold throughout the trading day. - correct answer ✔✔False
, Mutual funds with high turnover are more likely to have higher built-in gains than mutual funds
with lower turnover. - correct answer ✔✔False
Most mutual funds require a minimum investment of at least $10,000. - correct answer
✔✔False
Mutual funds are one of the most efficient ways to achieve diversification with a relatively small
investment. - correct answer ✔✔True
Professional management is one of the benefits of mutual funds. - correct answer ✔✔True
The management fee charged by mutual funds can be deducted as an itemized deduction
subject to 2% AGI limit. - correct answer ✔✔False
A shares are the cheapest in the long run for loaded shares. - correct answer ✔✔True
B shares revert to A shares after a number of years. - correct answer ✔✔True
An international equity fund will likely have a higher expense ratio than a domestic money
market fund. - correct answer ✔✔True
A 1% difference in expense ratio can produce substantial difference in overall performance over
a long period. - correct answer ✔✔True
Front-loads reduce the amount invested. - correct answer ✔✔True
12b-1 fees are applied annually, if at all. - correct answer ✔✔True
with 100% complete solutions
Mutual fund expense ratios include all of the following except? - correct answer ✔✔Investment
Losses
Which of the following is not an investment company? - correct answer ✔✔CMO
Which of the following statements concerning a unit Investment Trust is correct? - correct
answer ✔✔It has an unmanaged portfolio
Open end funds and closed-end funds are similar except for: - correct answer ✔✔Capitalization
Kevin is considering a mutual fund that invests only in technology companies. What is the best
term for this type of fund? - correct answer ✔✔sector fund
There is more money invested in bond funds than equity funds. - correct answer ✔✔False
Actively managed funds should have higher expense ratios than passively managed funds. -
correct answer ✔✔True
Market risk is the primary risk for equity mutual funds. - correct answer ✔✔True
Mutual funds can be sold throughout the trading day. - correct answer ✔✔False
, Mutual funds with high turnover are more likely to have higher built-in gains than mutual funds
with lower turnover. - correct answer ✔✔False
Most mutual funds require a minimum investment of at least $10,000. - correct answer
✔✔False
Mutual funds are one of the most efficient ways to achieve diversification with a relatively small
investment. - correct answer ✔✔True
Professional management is one of the benefits of mutual funds. - correct answer ✔✔True
The management fee charged by mutual funds can be deducted as an itemized deduction
subject to 2% AGI limit. - correct answer ✔✔False
A shares are the cheapest in the long run for loaded shares. - correct answer ✔✔True
B shares revert to A shares after a number of years. - correct answer ✔✔True
An international equity fund will likely have a higher expense ratio than a domestic money
market fund. - correct answer ✔✔True
A 1% difference in expense ratio can produce substantial difference in overall performance over
a long period. - correct answer ✔✔True
Front-loads reduce the amount invested. - correct answer ✔✔True
12b-1 fees are applied annually, if at all. - correct answer ✔✔True
