FCS-340 Final Exam Questions
and answers
Fixed number of shares issued when the fund is organized • Shares traded
on stock exchanges or the over-the-counter market • Trade price of shares
set by supply and demand ◦Trade like shares of common stock ◦Actively
managed...About 6% of all mutual funds - answer Closed-end Fund
Invests in securities contained in a specific securities index...About 12% of
all funds - answer Exchange-traded fund (ETF)
Shares issued and redeemed by the investment company at the request of
investors ◦Investors free to buy and sell shares at the net asset value
(NAV)...about 82% of all mutual funds - answer Open-End Fund
The value of the fund's portfolio minus liabilities divided by the number of
outstanding shares
NAV = Net Assets/Shares Outstanding - answer Net Asset Value
Mutual fund in which investors pay a commission (as high as 8.5%) every
time they purchase shares....Purchased through brokerage firms or
registered representatives Salespeople prepared to explain the fund and
help determine if it meets the investor's financial goals - answer Load
Fund
Mutual fund with no commissions on purchase or sale ◦No salespeople
◦Investor deals directly with the investment company via 800 numbers or
websites, or from discount brokers - answer No-load fund
A 1 to 5% charge that shareholders pay when they sell shares in a mutual
fund - answer contingent deferred sales load
How much can you expect to pay in management fees for most mutual
funds? - answer .25 to 1.5 % of the funds NAV (net ass value)
and answers
Fixed number of shares issued when the fund is organized • Shares traded
on stock exchanges or the over-the-counter market • Trade price of shares
set by supply and demand ◦Trade like shares of common stock ◦Actively
managed...About 6% of all mutual funds - answer Closed-end Fund
Invests in securities contained in a specific securities index...About 12% of
all funds - answer Exchange-traded fund (ETF)
Shares issued and redeemed by the investment company at the request of
investors ◦Investors free to buy and sell shares at the net asset value
(NAV)...about 82% of all mutual funds - answer Open-End Fund
The value of the fund's portfolio minus liabilities divided by the number of
outstanding shares
NAV = Net Assets/Shares Outstanding - answer Net Asset Value
Mutual fund in which investors pay a commission (as high as 8.5%) every
time they purchase shares....Purchased through brokerage firms or
registered representatives Salespeople prepared to explain the fund and
help determine if it meets the investor's financial goals - answer Load
Fund
Mutual fund with no commissions on purchase or sale ◦No salespeople
◦Investor deals directly with the investment company via 800 numbers or
websites, or from discount brokers - answer No-load fund
A 1 to 5% charge that shareholders pay when they sell shares in a mutual
fund - answer contingent deferred sales load
How much can you expect to pay in management fees for most mutual
funds? - answer .25 to 1.5 % of the funds NAV (net ass value)
