FINA 3315 EXAM 2 PRACTICE QUESTIONS
WITH DETAILED EXPLANATIONS 2026
◉ Net asset value (NAV).
Answer: The per-share value of a fund's assets minus liabilities.
◉ Open-end mutual fund.
Answer: A fund that issues and redeems shares directly with
investors at NAV.
◉ ETF (exchange-traded fund).
Answer: A fund that trades on an exchange like a stock and usually
tracks an index, sector, or group of assets.
◉ Premium (fund).
Answer: When a fund's market price is above its NAV.
◉ Discount (fund).
Answer: When a fund's market price is below its NAV.
◉ Growth and income fund.
,Answer: A fund that tries to provide both capital appreciation and
current income.
◉ Growth fund.
Answer: A fund that focuses on stocks expected to grow faster than
average.
◉ Aggressive growth fund.
Answer: A fund that invests in high-risk, fast-growing companies for
large capital gains.
◉ Value fund.
Answer: A fund that invests in stocks that appear undervalued.
◉ Equity-income fund.
Answer: A fund that invests mainly in dividend-paying stocks to
generate income.
◉ Target-date fund.
Answer: A fund designed for investors planning to retire around a
certain year and becomes more conservative over time.
◉ Money market fund.
, Answer: A fund that invests in short-term, low-risk debt securities.
◉ General-purpose money fund.
Answer: A taxable money market fund.
◉ Tax-exempt money fund.
Answer: A money market fund whose income is generally exempt
from federal income tax.
◉ Yield.
Answer: The income or return earned on an investment, usually
shown as a percentage.
◉ Mutual fund cash ratio (MFCR).
Answer: The amount of cash mutual funds hold relative to their
assets.
◉ Bullish.
Answer: Expecting prices to rise.
◉ Bearish.
Answer: Expecting prices to fall.
WITH DETAILED EXPLANATIONS 2026
◉ Net asset value (NAV).
Answer: The per-share value of a fund's assets minus liabilities.
◉ Open-end mutual fund.
Answer: A fund that issues and redeems shares directly with
investors at NAV.
◉ ETF (exchange-traded fund).
Answer: A fund that trades on an exchange like a stock and usually
tracks an index, sector, or group of assets.
◉ Premium (fund).
Answer: When a fund's market price is above its NAV.
◉ Discount (fund).
Answer: When a fund's market price is below its NAV.
◉ Growth and income fund.
,Answer: A fund that tries to provide both capital appreciation and
current income.
◉ Growth fund.
Answer: A fund that focuses on stocks expected to grow faster than
average.
◉ Aggressive growth fund.
Answer: A fund that invests in high-risk, fast-growing companies for
large capital gains.
◉ Value fund.
Answer: A fund that invests in stocks that appear undervalued.
◉ Equity-income fund.
Answer: A fund that invests mainly in dividend-paying stocks to
generate income.
◉ Target-date fund.
Answer: A fund designed for investors planning to retire around a
certain year and becomes more conservative over time.
◉ Money market fund.
, Answer: A fund that invests in short-term, low-risk debt securities.
◉ General-purpose money fund.
Answer: A taxable money market fund.
◉ Tax-exempt money fund.
Answer: A money market fund whose income is generally exempt
from federal income tax.
◉ Yield.
Answer: The income or return earned on an investment, usually
shown as a percentage.
◉ Mutual fund cash ratio (MFCR).
Answer: The amount of cash mutual funds hold relative to their
assets.
◉ Bullish.
Answer: Expecting prices to rise.
◉ Bearish.
Answer: Expecting prices to fall.
