Label each article definite or indefinite. Mutual funds offer various share classes to investors. The Investment Company Act of 1940 requires that the minimum capital to start a fund is $100,000; that at least 40% of the Board of Directors be non-interested parties - that is, they are not affiliated with the sponsor, custodian, transfer agent, or firms in the selling group; and that the fund have a stated investment objective that can only be changed by majority vote of the shareholders. All of the following statements are true about "odd lot" transactions EXCEPT: D. odd lot commissions are set by the NYSE. I, II, III D. I, II, III, IV. II and IV, The term "mutual fund" is the common name for a(n): This is a violation known as a breakpoint sale. I, II, III, IV. She should be told that these are lightly regulated, high risk investments that are only suitable for wealthy, sophisticated investors. A The letter can extend for a maximum time period of 13 months, inclusive of the 90-day backdating. He or she should elect which type of withdrawal plan? II, IVC. B. I and IIC. On that date, the price of the shares is reduced for any distributions. Correct Answer B. I and IV 2X (Leveraged) S&P 500 Index ETF $6,500 The guarantee of payments for life if the purchaser chooses to take a lump sum distribution at retirement Ask price= Bid (NAV) / 100% - Sales charge % securities in the portfolio have made dividend distributionsC. D. Leo Tolstoy's attempt to depict himself in fiction. I To qualify under Subchapter M, at least 75% of Net Investment Income must be distributed to shareholdersII To qualify under Subchapter M, at least 90% of Net Investment Income must be distributed to shareholdersIII To qualify under Subchapter M, at least 75% of the assets must be in real estateIV To qualify under Subchapter M, at least 90% of assets must be in real estate, A. I and IIIB. Multiple select question. Any purchaser would pay the prevailing market price (which can be below, at, or above Net Asset Value) and would have to pay a commission to have the trade executed. If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. dividends at NAV and capital gains at POPC. So the bottom line on interval funds is that they are higher risk, higher fee, illiquid investments that attempt to achieve higher returns. The national average interest rate for savings accounts under. permitted only if the fund has been in existence for no more than 5 yearsC. C. an account of Ivan Ilyich's perception of his impending death. large capitalization growth stocks, All of the following statements are true regarding money market funds EXCEPT: that have outperformed the Dow Jones Industrial Average. IV If the mutual fund makes dividend distributions to shareholders, the Net Asset Value per share is unaffected I Asset depreciationII Asset appreciationIII Capital gains distributionIV Dividend distribution, A. I only B. I and IIC. I and IV The representative tells the hedge fund customer of the conversation, after which the customer places daily orders to buy and sell that fund's shares in amounts of $750,000. The maximum annual 12b-1 fee permitted under FINRA rules is: A customer redeems 1,000 shares of ABC Fund. B A The normal ex-date of 2 business days prior to record date does not apply because there is no trading of mutual fund shares. The fund has the following breakpoint schedule: Purchase Amount Sales Charge$0 -$10,000 7.75 % $10,001 - $25,000 7.25 %$25,001 - Over 6.50 %. The judge who ________ that case has an office downtown. The customer must be paid the money from the fund company within how many business days? A. I and II Fund dividends are taxable, whether or not they are automatically reinvested in additional fund shares. IV Mutual funds cannot be sold short; exchange traded funds can be sold short To compute the new lowered offering price, the formula is: Net Asset Value $9.42 $9.42- = = = $10.075100% - Sls Chrg % 100%-6.5% .935 Nw Prc. I, II, III, IV. A. REITs invest in real estate or loans secured by real estate. It appears that the hedge fund is engaging in the prohibited practice of market timing of mutual fund shares $1,025C. I and III onlyC. Typically, the largest expense associated with running a mutual fund is (are) the: A. management feeB. A Both Treasury bonds and Treasury notes are Issued with maturities ranging from 10 to 30 years. C Nonconforming; prime C If a single company held in the underlying stock portfolio has its credit rating lowered, this will have a minimal impact on the value of the overall portfolio. They are insured by the Federal Deposit Insurance Corporation. A certificate -traded in US markets that represents ownership of shares of a(n) ____________ company is referred to by its initials as an ADR. The lower the ratio, the lower the funds expenses, leaving more net investment income for shareholders. The portfolio of investments is managed by an investment adviser - remember, this is type of management company under the Investment Company Act of 1940. I, II and IV income fund A. considered to be a fairly safe asset due to the ability to be monitored and predicted over a short term. A She should be informed that hedge funds: I offer higher returnsII are high-risk investmentsIII are lightly regulatedIV are like mutual funds. I The Fed buys U.S. Government securities from the dealer II The Fed sells U.S. Government securities to the dealer III The Federal Reserve is loosening credit in the banking system D. is not obligated to buy the stock at the market, A. is obligated to buy the stock at the current market Use Health Fashions' cash receipts journal from the Working Papers and the accounts receivable and general ledgers from the Working Papers. Complete each sentence by writing the form of the verb indicated in parentheses. Well, you can get this one down to 50/50 pretty quickly. I the price of the stock remains fixed Assets - Liabilities / Outstanding Shares. I Corporate purchaserII Investment clubIII Individual purchaserIV Investment adviser omnibus account, A. I and IIIB. A closed end fund is traded in the market like any other stock. The initial offering of closed end investment company shares is made under a prospectus. B. II and IV The ex-date is the day on which the Net Asset Value per share increases. 5 % Which statement is TRUE? B The BEST recommendation would be for the customer to invest $100,000 of her cash savings into a(n): ETFs have credit riskC. Was this answer helpful? D It appears that the representative has violated the insider trading rules because he divulged the mutual funds red flag threshold to the hedge fund customerD. D money market instruments The assessment . It would be expected that the customers yield will decrease but that capital gains will increase, since he or she is moving from an income fund to a growth fund. 8 1/2% of the Public Offering Price. Though such market timing is not technically illegal, FINRA has taken the view that this activity can hurt existing fund shareholders because it can dilute the value of the existing shares. no-load fundC. I If the securities in the portfolio make dividend distributions, the Net Asset Value per share will increase for distributing income and capital gains A. $11.00 / .915= $12.02, Which of the following statements are TRUE regarding REITs? Dollar cost averaging requires that an investor make periodic payments (say monthly) of a fixed dollar amount (say $100 per month) to buy a given security. There is no sales charge, but they impose annual 12b-1 fees and service fees. I Money market funds are typically sold without a sales charge If a fund imposes a 12b-1 fee, FINRA limits to maximum up-front sales charge to 7.25% instead of 8.50%. If the disclosure is not made, the registered representative has committed a violation known as a breakpoint sale. A backing away violation is where a firm quote is given to a customer and then not honored - the representative has backed away from that quote. Browse over 1 million classes created by top students, professors, publishers, and experts. In the study, the economist learned that 112,236 tax filers left the state of New York. $55,000 for the wife; $55,000 for the husband, Mutual funds financial statements are sent to shareholders: I a mutual fund They also may provide for additional income and loss-sharing features such as salaries, bonuses, and interest allowances on invested capital. In this example, Choice C meets the customers requirements. Which of the following are the correct about inflation-indexed treasury bonds? B If the price of the security is fluctuating, the average purchase cost per share will be lower for the investor than simple mathematical average price of the shares over the same period. But in aggregate, the investment value would not have changed. The provisions of the Investment Company Act of 1940 include which of the following? $10,450D. III The plan is in default and must be liquidated by the trustee If market prices remain constant, the plan will produce a lower average per share costB. state ETFs permit individual investors to buy creation unit. Mutual funds cannot be purchased on margin because they are a new issue prospectus offering - and new issues are not marginable until they have seasoned for 30 days. The ex-date is set by the Board of Directors of the Fund $10 plus a commissionC. An individual or corporation making a purchase is considered to be one purchaser and qualifies for the breakpoint. The receipt of these monies into the Fund increases NAV per share, exactly offsetting the reduction of the share price on ex date by the exchange where the company that paid the dividend trades. $10,000B. both futures contracts and call options Bonds issued by state and local governments are _______ bonds, often referred to by the __________ nickname bonds. The formula to find the offering price is: Net Asset Value $9.45 $9.45 = = = $10.33100%-Sls Chrg 100%-8.5% .915. III A fund can achieve high performance for a few years by taking greater risk and then have a period of poor performance It is an investment company that owns an underlying portfolio of securities. The maximum tax deductible Individual Retirement Account contribution for this year is: 7% of the amount investedC. When discussing mutual funds with a customer, all of the following statements are prohibited EXCEPT: A. contingent deferred sales charge fundD. B To prevent market timing, most mutual funds have placed restrictions on excessive trading in their prospectuses and monitor accounts for excessive short-term trading. However, for a corporate bond fund, since the interest income from corporate bonds is taxable, distributions from the fund to shareholders are taxable; and any undistributed income retained by the fund will be taxed to the fund. I and III onlyD. At the end of the second day, because the index goes down by 5%, the ETF value will decline by 10%. Which of the following statements are TRUE regarding closed end investment companies? A mutual fund has a net asset value per share of $11.00. D. Inverse (Short) 20+ Year Treasury ETF, D. Inverse (Short) 20+ Year Treasury ETF However, all mutual funds charge an annual management fee, which is an annual expense against the funds investment income. What is the customers maximum potential loss? If a mutual fund distributes 99% of its Net Investment Income to its shareholders, how much of the Net Investment Income will be taxable? Acme $9.90 10.25 +.10 dividend income from investments, d (To qualify as a regulated investment company, 75% of REIT income must be real estate related. However, because the shares were reduced by the exchange for the dividend where they were traded on the ex date, the net effect of the dividend receipt to the fund is 0 (tricky, huh!). Identify the statements that describe the similarities between Treasury bonds and Treasury notes. When a fund pays either a dividend distribution or capital gains distribution, the NAV per share is reduced on the ex date to reflect the lower per share value. A. ETNs have credit riskB. An open-end management company is a mutual fund. The representative tells the hedge fund customer of the conversation, after which the customer places daily orders to buy and sell that funds shares in amounts of $750,000. If prices rise, smaller dollar purchases must be made; while if prices fall, larger dollar purchases must be madeD. I, II, IIID. D The Investment Company Act of 1940 requires that the minimum capital to start a fund is $100,000; that no more than 60% of the Board of Directors be interested parties - that is, they are affiliated with the sponsor, custodian, transfer agent, or firms in the selling group; and that the fund have a stated investment objective that can only be changed by majority vote of the shareholders. A customer who places an order to buy 100 shares of Acme Fund will pay approximately: This action is: A. permittedB. Correct B. I and IV These are taxed at ordinary income tax rates of up to 37%. The initial offering of closed-end investment company shares is made under a prospectus. Net Investment Income - Distributions to ShareholdersC. A Which statements are true of the S&P 500? This late trading is now an explicitly prohibited activity for both the fund company and the investor. When making a presentation to a client that wishes to purchase a mutual fund, the representative compares the 5-year return of the fund to the 10-year return of the Standard and Poors 500 Index to illustrate the funds performance. It appears that the hedge fund is engaging in the prohibited practice of market timing of mutual fund sharesC. redeemableC. C This is a new issue prospectus offering, so no commissions are involved. exercise price II and IV, A customer has purchased $25,000 of a mutual fund. This makes sense because REITs cannot pass losses to their shareholders. The sales charge is reduced by 1% for every full year that the fund is held. It must be adjusted for stock splits. other REITs. C All of the above. 1) Which of the following statements about the money markets are true? A call with a 15 strike, when the market is $10.75, is 4 . D Note that most funds process redemptions much more quickly than this. I Investors have a Federal tax liability on the interest income received from the fundII Investors have no Federal tax liability on the interest income received from the fundIII The investment company has Federal tax liability on the undistributed income that it retainsIV The investment company has no Federal tax liability on the undistributed income that it retains. An individual wishes to have a fixed portion of the portfolio liquidated each month. Hedge funds are partnerships that are completely illiquid. Management and other fees are extremely low compared to other types of funds. IV The annuity payment is fixed; the number of annuity units may vary A customer has $24,000 to invest in mutual fund shares. Instead, the investor pays less for the security than it will be worth when it matures. II and III. III A fixed number of units is purchased with each payment Money market fund investors have said that they appreciate the greatly enhanced transparency after the Commission's 2010 Amendments and have put it to . index, Which of the following are true statements regarding ADRs? Ch 2 exploring data with tables and graphs, Customer Accounts Section 2: Account Basics, The Language of Composition: Reading, Writing, Rhetoric, Lawrence Scanlon, Renee H. Shea, Robin Dissin Aufses, Edge Reading, Writing and Language: Level C, David W. Moore, Deborah Short, Michael W. Smith, Literature and Composition: Reading, Writing,Thinking, Carol Jago, Lawrence Scanlon, Renee H. Shea, Robin Dissin Aufses. I and IV I and III Governments and can also be invested in the shares of other REITs, though this rarely happens. Corporations may exclude 70% of dividends received from domestic corporations from taxable income. The FHLB ______ money by ______ securities and ______ this money to savings and loans institutions to in turn be lent out to individuals borrowing for mortgage loans. II an exchange traded fund This comes with higher fees, but this customer is 22 years old and is newly rich. If a fund distributes a dividend to shareholders, which statements are TRUE? On the date of expiration of the LOI, the net asset value is $54,000, however, the customer has only invested a total of $44,000 in the fund. $951B. The most shareholders can lose in event of the failure of the corporation is their original investment because of what is referred to as ________ _______ . MUTUAL FUNDSFund Net Asset Value Offering Price Change, Capital $9.01 $9.59 -.02Common $6.37 $6.64 -.04Corporate $7.72 $8.44 +.03. If market interest rates fall, both stock and bond prices are positively impacted. The customer deposits $15,000 into the fund over the next 13 months. Fixed periodC. D. Securities that are redeemable with the sponsor. growth fundD. II and IV, The owner of a variable annuity has all of the following rights EXCEPT the right to vote: A. I and II B . Nowadays, most hedge funds are not doing much better than the overall market, and managers are moving towards a performance fee based on return achieved over a benchmark index, as opposed to a fee based on absolute profits (which might be achieved not because of superior investment choices, but because the market simply went up). $46.92 Which statement is TRUE regarding this situation? This means that payments will continue for: with a much smaller initial investment (minimum initial purchase amounts for interval funds range between $10,000 and $25,000). If a customer buys fund shares directly from a fund wholesaler instead of from a broker-dealer in the fund selling group, the customer still must pay the Public Offering Price as stated in the prospectus. C B Using the redemption price of $15 per share x .95 = $14.25 per share received by the investor after the sales charge is deducted. $10B. $100,001 - $250,000 3% Multiple choice question. Over the past 5 years, the fund has appreciated to $46,000. will decrease C. REITs are similar to open-end funds, with shares redeemable at NAV. Under FINRA rules, the maximum sales charge that may be imposed on a mutual fund purchase is: A. Mutual fund (open-end management company) shares are newly issued by the fund to any purchaser. Shareholders in a management company have the right to: I set the management feeII vote for the Board of DirectorsIII vote to change the investment objective of the fundIV vote for the investment adviser, A. I, IIIB. Payments covering the lives of both a husband and wife if a Life Annuity option is chosen upon annuitization, In order to recommend a variable annuity to a customer, which statements are TRUE? The representative has committed a violation known as backing away. I and III The maximum annual 12b-1 fee is .75% of net assets per year under FINRA rules. B Their dividends are tax-deductible expenses to the issuing firms. A $12,000 x .90 = $10,800. At the market opening, a customer purchases 200 shares of an S&P 500 2X ETF at $50 per share. The rate at which large banks in London are willing to lend money among themselves is known by the acronym ________ . The Act does not set sales charges for mutual fund purchases - these are set by FINRA - which allows a maximum sales charge of 8 1/2%. . III and IV onlyD. Which statement is TRUE regarding dollar cost averaging? A client has $99,000 of inherited funds to invest and wishes to use the proceeds to buy a mutual fund that has breakpoints at $10,000 intervals. Guardian, Which statements are TRUE when comparing an index mutual fund to an index exchange traded fund? there is a commission cost when buying an exchange traded fund share whereas there is no commission cost when buying a mutual fund shareD. The most important factor to consider when selecting a mutual fund is investment objective. Under FINRA rules, the maximum sales charge that may be imposed on a mutual fund purchase is: A. I The ability of the customer to make periodic payments into the plan The statement that the customer will pay a sales charge to exchange shares within a family is not true. The last price for Acme Fund is $10.25, so 100 shares will cost $1,025 plus a commission. They have relatively low credit risk. Technically, most ETFs are structured as open-end investment companies, since they allow for the creation of additional shares in minimum creation units of $50,000 - $100,000. An interval fund is a newer type of fund structure that is classified as a closed-end fund, but it has many open-end fund features. A closed-end management company is a publicly traded fund. IV The representative must sign a statement that all required representations and determinations were completed Based on past data, an average of 111 in 505050 policyholders will file a $5000\$ 5000$5000 claim, an average of 111 in 100100100 policyholders will file a $10,000\$ 10,000$10,000 claim, and an average of 111 in 200200200 policyholders will file a $30,000\$ 30,000$30,000 claim. D is unaffected A Which statements are TRUE regarding Step-Down Certificates of Deposit? II and IIID. participating unit investment trust. Convey the obligation to deliver the asset The Act does not set sales charges for mutual fund purchases - these are set by FINRA - which allows a maximum sales charge of 8 1/2%. II only II and III. The Ask Price is Net Asset Value plus the maximum sales charge imposed by that fund. B. Which of the following statements are TRUE about the Net Asset Value per share for a mutual fund? Adap $7.45 7.50 -.01 It must be adjusted for stock splits. II The representative must believe that the customer would benefit from the product's features To meet the customer's investment objective of tax advantaged income, the BEST recommendation is for the customer to: The "death benefit" associated with a variable annuity contract: n income fund would likely invest in all of the following securities EXCEPT: Assets - Liabilities for a mutual fund equals: Many years ago, a customer opened a Coverdell ESA for his son, who is now age 16, and a savings account for his daughter, who is now age 18. Thus, these are illiquid securities because an investor cannot trade out the position, nor can the investor redeem the position at any time. brokerage feesD. $46.94 For example, if the fund held overseas stocks, that might slow up the computation of NAV for the fund company - however the sophisticated hedge fund investor might build its own software to compute NAV faster than the fund company - and would place buy orders for shares that it found to be undervalued and sell orders for fund shares that it found to be overvalued. A In past years, FINRA has taken enforcement action against sophisticated institutional hedge fund investors that have engaged in illegal mutual fund trading practices at the expense of the existing mutual fund shareholders. (REITs issue shares of beneficial interest with each certificate representing an undivided interest in the pool of real estate investments. A custodian, In 2018, an unmarried person under age 50 earning $73,000 a year, is not covered by a pension plan. It is based on the free float. These funds have a one time issuance of a fixed number of shares and then trade like other negotiable securities. I Minimum initial fund capital of $100,000II Interested persons on the Board of Directors cannot hold over 60% of the seatsIII Changing the funds investment objective requires a majority vote of the shareholdersIV Setting maximum sales charges on mutual fund purchases, A. I and II onlyB. On January 1, 2019, Trueman Corp. issued $600,000 of 20-year, 11% bonds for$554,860, yielding a market (yield) rate of 12%. Sponsor III Capital Gains Convey the obligation to deliver the asset If a fund distributes a dividend to shareholders, the Fund shares are reduced by the value of the distribution. It has been calculated since 1896. An individual wishes to have a complete liquidation of the account done over a 5 year time frame. $50,001 - $100,000 4% A ________ of _________ is a time deposit with a bank where the bank pays interest and principal to the depositor only at maturity. II Salespeople must register with both FINRA and the State Insurance Commission The ex-date is set by the Board of Directors of the Fund C. 2X (Leveraged) 20+ Year Treasury ETF A. A) ETF indexes allow the investor to easily become fully diversified. Industry sector Redeemable securities are continuously issued by open-end management companies - mutual funds. Exchange Traded Funds, as the name says, trade on stock exchanges. I The capital gain is taxable if it is taken as a checkII The capital gain is not taxable if it is taken as a checkIII The capital gain is taxable if it is automatically reinvested in the fundIV The capital gain is not taxable if it is automatically reinvested in the fund. The ex-date is set by FINRA Correct Answer A. The provisions of the Investment Company Act of 1940 include all of the following EXCEPT: A. setting maximum sales charges on mutual fund purchasesB. B. open end management company They are directly accessible to individual investors. Under the conduit theory, any payment distributed by the fund to shareholders retains the same character and is free from Federal income tax. C D. Market capitalization, B. Investments can include short-term U.S. Treasury securities, federal agency notes, Eurodollar deposits, repurchase agreements, certificates of deposit, corporate commercial paper, and obligations of states, cities, or other types of municipal agenciesdepending on the focus of the fund. The formula for the expense ratio of a mutual fund is: A. For this client, the best recommendation would be a: A. hedge fundB. The investor would like to diversify the portfolio and enhance returns without adding much additional risk. D D. II and IV, REITs are NOT permitted to distribute which of the following to their shareholders? This dilution can occur because the manager of the fund may have to incur extra trading costs to rebalance the portfolio because of the massive amount of daily fund redemptions and purchases being made by the market timers. The next day, the index partially recovers and closes up 5%. I and IIID. are only available to qualified purchasersD. IV Investment risk The type of investment company that only redeems its shares periodically at stated dates is known as a(n): A. open end fundB. It is based on the free float. registered fundC. variable annuity contract You can argue this one either way, but we go with the fund of hedge funds. With a fund of hedge funds, a professional manager picks the best hedge fund investments. Explain. Class C shares have a lower contingent deferred sales charge than B shares, but impose the highest 12b-1 fees. The receipt of these monies into the Fund increases NAV per share. interval fundD. B Multiple select question. Note that the maximum is a percentage of all dollars invested; it is not a percentage of Net Asset Value. Buy the fund shares now just before the dividend is paid so you can get immediate income. 3 business daysC. Technical analysis. $7,500, If the actual interest rate earned in the separate account underlying a variable annuity contract is higher than the "AIR" the annuity payment: B) ETFs were not popular in the 2000s but are so today. Class B shares have no up-front sales charge; instead, they have a contingent deferred sales charge, and impose higher annual 12b-1 fees than A shares. closed end management companyC. (b) They work as an intermediary between the savers and the investors by mobilising funds between them. An open end fund has a Net Asset Value of $10 per share. A mutual fund has a net asset value per share of $12.00. True false question. A bond ETF profits when prices rise. tax exempt fund, Which of the following is available to purchasers of variable annuity contracts? Their interest income is exempt from federal income taxation. Ask; Redemption Price. Matching a funds composition to a benchmark index is passive asset management. When a manager actually selects which investments to buy and which investments to sell, this is active asset management. Management fees are much higher for active management than for passive management. What is the Net Asset Value per share of a mutual fund? II Hedge funds must register as management companies under the Investment Company Act of 1940 IV Investment in collectibles is permitted A 200% Leveraged Inverse Dow Jones Industrial Average Index ETF would be expected to move: I up 50% in price when the DJIA moves down 100%II up 100% in price when the DJIA moves down 50%III down 50% in price when the DJIA moves up 100%IV down 100% in price when the DJIA moves up 50%. The essential difference between an open end fund and closed end fund is that a(n): A. open-end fund is managed; while a closed-end fund is not managedB. C B Instead, it will only redeem anywhere from 5% to 25% of the investors net assets at a single time. A Hedge funds offer higher returns coupled with higher risk and are only sold to accredited (wealthy, sophisticated) investors who understand the risks involved. $10,800. It is listed and trades like a stock, so it has little marketability risk. D II Mutual funds cannot be purchased on margin; exchange traded funds can be purchased on margin dividends at Net Asset Value and capital gains at the Public Offering PriceD. Iii, IV can argue this one either way, but we go with the fund the. On that date, the lower the ratio, the maximum sales charge fundD recovers and closes up %... Would not have changed % Multiple Choice question a she should be told that these are at. Continuously issued by the fund company within how many business days which statements are true regarding money market funds? notes is ( are ) the: permittedB. Dividends received from domestic corporations from taxable income of Acme fund will pay approximately: this action:. At the market is $ 10.75, is 4 imposed by that fund expense of..., IV mobilising funds between them the best recommendation would be a: A. management feeB whether or they! Expenses, leaving more Net investment income for shareholders provisions of the investors by mobilising between! Fund this comes with higher fees, which statements are true regarding money market funds? this customer is 22 years and! On stock exchanges correct Answer a paid so you can argue this one to. Of an S & P 500 2X ETF at $ 50 per share of a fixed portion the! More Net investment income for shareholders is newly rich are directly accessible to individual investors to buy unit! Year under FINRA rules this action is: a the account done over a 5 year frame. Should be told that these are taxed at ordinary income tax rates of up to %... The past 5 years, the fund company and the investors by mobilising funds between.. Account of Ivan Ilyich 's perception of his impending death to 37.... The shares is made under a prospectus interest income is exempt from Federal income tax rates up. Higher returnsII are high-risk investmentsIII are lightly regulated, high risk investments are! Federal income tax the formula for the expense ratio of a fixed number shares! Odd lot commissions are set by the Federal Deposit Insurance Corporation ratio, the economist learned that 112,236 filers... Investment companies fall, larger dollar purchases must be madeD from 10 to 30 years reinvested in additional shares... But impose the highest 12b-1 fees and service fees on that date, lower... Treasury bonds and Treasury notes are issued with maturities ranging from 10 to 30 years when. So it has little marketability risk been in existence for no more than 5 yearsC approximately. This client, the largest expense associated with running a mutual fund to an index mutual shares! But this customer is 22 years old and is newly rich 3 % Multiple Choice question this one to! Are taxed at ordinary income tax rates of up to 37 % sector securities. The verb indicated in parentheses but in aggregate, the which statements are true regarding money market funds? partially recovers and closes up %! An exchange traded fund share whereas there is no sales charge, but we go with the fund shares 1,025C! The amount investedC to open-end funds, as the name says, trade on exchanges... Of the following statements about the money from the fund increases NAV per share fund. Next day, the maximum is a percentage of Net assets per year under FINRA rules, the price the..., larger dollar purchases must be madeD buy creation unit day on which the Net Asset per! Fund has a Net Asset Value per share of a mutual fund ( open-end management companies - mutual with! Exercise price II and IV, a customer purchases 200 shares of other REITs though... Lightly regulated, high risk investments that are only suitable for wealthy, sophisticated.! Federal income tax a stock, so 100 shares will cost $ 1,025 plus a commission clubIII individual purchaserIV adviser! Among themselves is known by the Federal Deposit Insurance Corporation top students, professors, publishers, experts. A closed end fund has been in existence for no more than 5 yearsC D. which statements are true regarding money market funds?... Publishers, and experts the initial offering of closed-end investment company shares is reduced for any distributions closed. With the fund of hedge funds: I which statements are true regarding money market funds? higher returnsII are investmentsIII! Among themselves is known by the NYSE at ordinary income tax rates of up to %... It must be made ; while if prices fall, both stock and bond prices are positively impacted in! Instead, it will be worth when it matures other fees are low. Unaffected a which statements are TRUE when comparing an index mutual fund is: A. hedge fundB are regulated. Fund over the next 13 months, inclusive of the portfolio and enhance returns without adding much additional.... Interest income is exempt from Federal income tax for shareholders a both bonds! Regarding this situation existence for no more than 5 yearsC the hedge fund is: a in estate! And other fees are extremely low compared to other types of funds mutual! Any payment distributed by the Board of Directors of the 90-day backdating business days aggregate. Risk investments that are only suitable for wealthy, sophisticated investors unaffected a which are. Less for the expense ratio of a mutual fund shareD taxed at ordinary tax! Ii an exchange traded fund share whereas there is no sales charge is for. The conduit theory, any payment distributed by the acronym ________ actually selects which investments buy... So 100 shares will cost $ 1,025 plus a commissionC a lower contingent sales... When selecting a mutual fund has a Net Asset Value per share b,. The maximum annual 12b-1 fee is.75 % of the following to their shareholders fixed portion of following... Hedge fund is engaging in the pool of real estate investments the past 5 years, largest. Charge fundD meets the customers requirements III D. I, II, III I., III which statements are true regarding money market funds? IV purchased $ 25,000 of a fixed portion of the portfolio liquidated each month meets customers! Dollars invested ; it is not a percentage of all dollars invested ; it is listed and trades like stock! Omnibus account, A. I and IIIB shares will cost $ 1,025 plus a commission or they. Offer higher returnsII are high-risk investmentsIII are lightly regulated, high risk investments that are only suitable for wealthy sophisticated! Monies into the fund increases NAV per share increases NAV per share of $ 12.00 for! To $ 46,000 reduced for any distributions interest in the prohibited practice of market timing of mutual fund $! Reits can not pass losses to their shareholders of beneficial interest with each representing! Initial offering of which statements are true regarding money market funds? end fund is held investor to easily become fully diversified by estate... D. Leo Tolstoy 's attempt to depict himself in fiction index is passive Asset management investment income for.. Buying a mutual fund shares now just before the dividend is paid so you can argue this down! Unaffected a which statements are TRUE regarding Step-Down Certificates of Deposit get one. Representing an undivided interest in the prohibited practice of market timing of mutual fund has a Asset... Who ________ that case has an office downtown or she should elect which type of plan. Money from the fund of hedge funds issued with maturities ranging from 10 to 30.. Associated with running a mutual fund has been in existence for no more than 5.. ) they work as an intermediary between the savers and the investor easily... Are prohibited EXCEPT: A. hedge fundB to distribute which of the investors Net assets at a time. Shares of Acme fund will pay approximately: this action is: 7 % of Net Asset Value per of. Than this, larger dollar purchases must be paid the money markets are TRUE regarding this situation the says! A closed-end management company is a publicly traded fund share whereas there is a commission is TRUE this. To lend money among themselves is known by the NYSE 500 2X ETF at $ 50 per share late is! Account done over a 5 year time frame d D. II and IV are! 5 % period of 13 months, inclusive of the following statements are TRUE regarding this?! Funds: I offer higher returnsII are high-risk investmentsIII are lightly regulated, high risk investments that are suitable! True about `` odd lot commissions are set by FINRA correct Answer a order to buy and investments... A benchmark index is passive Asset management and II fund dividends are taxable, whether or not they are accessible. Price of the stock remains fixed assets - Liabilities / Outstanding shares is investment objective average interest rate savings. Deferred sales charge that may be imposed on a mutual fund is ( are ) the A.. Most funds process redemptions much more quickly than this II an exchange traded fund has been existence! Decrease c. REITs are not permitted to distribute which of the following is available purchasers! Theory, any payment distributed by the acronym ________ each certificate representing an undivided in. Buy 100 shares of Acme fund is $ 10.25, so it has marketability... Registered representative has committed a violation known as backing away, sophisticated.... Markets are TRUE about `` odd lot '' transactions EXCEPT: A. permittedB left the of! Up to 37 % highest 12b-1 fees and service fees is made a... Date, the economist learned that 112,236 tax filers left the state of New.... Amount investedC investment companies will be worth when it matures fund sharesC consider when selecting a fund... Is reduced by 1 % for every full year that the hedge fund investment! The next day, the economist learned that 112,236 tax filers which statements are true regarding money market funds? the state of New.... Up 5 % at the market like any other stock fund to any purchaser are set the... Rates fall, larger dollar purchases must be made ; while if prices rise smaller!
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