Series 65 Exam Lesson 25 Mutual Funds pt 2 Series 65 Exam Podcast

Series 65 Exam Quiz Mutual Funds 2

This is a Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2: a free quiz for Series 65 Exam Quiz Mutual Funds 2 which is covering mutual funds pt 2 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2 covering more fundamentals of mutual funds you need to understand for the Series 65 Exam

Below are questions based on the lesson 25  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2

1. Which of the following is true about closed-end funds?

(Select all that apply.)

A. It can trade at a premium or at discount to net asset value.

B. It is redeemed.

C. It has a fixed maturity and interest rate.

D. It trades as a common stock on the exchanges wherever it is listed.

2. Which of the following details can be found on the website of the company that sponsors a closed-end fund?

(Select all that apply.)

A. discount to net asset value

B. net asset value

C. premium

D. price of the stock

3. It is the amount annually collected from the shareholders, which include all the operating cost of the fund.

A. conversion ratio

B. expense ratio

C. liquidity ratio

D. Sharpe ratio

4. If a closed-end fund has a very high expense ratio, one reason you might wish to buy the fund is because ___.

A. it is sold at net asset value

B. it is sold at net asset value less than the expense ratio

C. it is sold at par value

D. it is sold at a big discount to net asset value

5. In financial industry, “Red Herring” refers to ___.

A. expense ratio

B. hedge funds

C. master limited partnerships

D. preliminary prospectus

6. Which of the following is true about a preliminary prospectus?

(Select all that apply.)

A. It contains the price of shares agreed upon.

B. It contains the total number of shares issued.

C. It does not contain the price of shares agreed upon.

D. It does not contain the total number of shares issued.

7. One way that funds will get a higher return than the market average or a bigger loss than the market average is by leveraging their assets.

A. True

B. False

8. A fund is leveraged at 9.2%. If it has $80,000,000 in its assets, the portfolio would reflect a value of ___.

A. $7,360,000

B. $72,640,000

C. $73,600,000

D. $87,360,000

9. Leveraged funds enhance returns and outperform the market when stocks are going down.

A. True

B. False

10. A mutual fund or a management company must distribute their income ___.

A. annually

B. monthly

C. quarterly

D. weekly

11. A management company distributes its income in a form of ___.

(Select all that apply.)

A. capital gains

B. commissions

C. dividends

D. interest

12. These are capital gains that the management company must distribute at least on an annual basis.

A. capital yield

B. distribution yield

C. dividend yield

D. income yield

13. Dividend yield is the dividend that is paid out from the stocks that the management company owns and then passed through to the investors.

A. True

B. False

14. If you buy a closed-end fund before or close to the record date, your net asset value would decline by the amount of the distribution.

A. True

B. False

15. What would be a good reason for management companies to organize as master limited partnerships?

A. They want to acquire big positions in closed-end funds.

B. They want to avoid the double taxation.

C. They want to decrease their management expenses.

D. They want to increase their management fees.

16.