ESSENTIALS OF INVESTMENTS (GLOBAL EDITION) CHAPTER 4 QUESTIONS WITH CORRECT ANSWERS

ESSENTIALS OF INVESTMENTS (GLOBAL
EDITION) CHAPTER 4 QUESTIONS WITH
CORRECT ANSWERS 2026-2027
investment companies - correct answer-
financial intermediaries that invest the funds of individual investors in securities or other assets



net asset value (NAV) -Kcorrect answer-assets minus liabilities expressed on a per-share basis
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




unit investment trusts - correct answer-
X2 X2 X2 X2 X2




money pooled from many investors that is invested in a portfolio fixed for the life of the fund
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




open-end fund - correct answer-a fund that issues or redeems its shares at net asset value
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




closed-end fund - correct answer- X2 X2 X2 X2




shares may not be redeemed, but instead are traded at prices that can differ from net asset value
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




load -Kcorrect answer-a sales commission charged on a mutual fund
X2 X2 X2 X2 X2 X2 X2 X2 X2




hedge fund - correct answer- X2 X2 X2 X2




a private investment pool, open to wealthy or institutional investors, that is exempt from SEC regulation a
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




nd can therefore pursue more speculative policies than mutual funds
X2 X2 X2 X2 X2 X2 X2 X2 X2




funds of funds -Kcorrect answer-mutual funds that primarly invest in shares of other mutual funds
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




12-b1 fees - correct answer- X2 X2 X2 X2




annual feesKcharged by a mutual fund to pay for marketing and distribution costs
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




soft dollars -Kcorrect answer-
X2 X2 X2




the value of research services that brokerage houses provide 'free of charge' in exchange for the investm en
X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2 X2




st manager's business
X2 X2