Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Certdemy free practice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following is/are the correct sub-classifications of equity mutual fund investment styles based on a valuation approach?
I. Value funds
II. Growth funds
III. Blend funds
IV. Growth fundsCorrect
Although there are numerous sub-classifications of equity mutual fund investment styles, funds are typically grouped into one of three categories based on a valuation approach and one of three categories based on capitalization. The three valuation approaches are value, growth, and blend.
Incorrect
Although there are numerous sub-classifications of equity mutual fund investment styles, funds are typically grouped into one of three categories based on a valuation approach and one of three categories based on capitalization. The three valuation approaches are value, growth, and blend.
-
Question 2 of 10
2. Question
What are value funds?
Correct
Value funds are those that primarily invest in securities that the portfolio management team believes to be undervalued considering business conditions and valuations of competitors.
Incorrect
Value funds are those that primarily invest in securities that the portfolio management team believes to be undervalued considering business conditions and valuations of competitors.
-
Question 3 of 10
3. Question
Which of the following statement(s) is(are) true about net asset value (NAV)?
I. The net asset value (NAV) of a mutual fund is equivalent to an equity security’s stock price
II. The net asset value represents the current cost/value to an investor of one share.
III. The net asset value of a mutual fund is calculated by summing up the value of all of the securities held, subtracting out any liabilities and the operating expenses of the fund, and then dividing the result by the number of outstanding shares.
IV. The net asset value is only calculated daily.Correct
The net asset value (NAV) of a mutual fund is equivalent to an equity security’s stock price; that is, it represents the current cost/value to an investor of one share. The net asset value of a mutual fund is calculated by summing up the value of all of the securities held, subtracting out any liabilities and the operating expenses of the fund, and then dividing the result by the number of outstanding shares. Unlike stock prices, which adjust throughout the day, the net asset value is only calculated daily. A more frequent calculation would be extremely cumbersome, both for the investment company and for investors. The NAV is calculated once the market closes each day with the closing security prices as of that day. That is the NAV that is in effect for the following trading day.
Incorrect
The net asset value (NAV) of a mutual fund is equivalent to an equity security’s stock price; that is, it represents the current cost/value to an investor of one share. The net asset value of a mutual fund is calculated by summing up the value of all of the securities held, subtracting out any liabilities and the operating expenses of the fund, and then dividing the result by the number of outstanding shares. Unlike stock prices, which adjust throughout the day, the net asset value is only calculated daily. A more frequent calculation would be extremely cumbersome, both for the investment company and for investors. The NAV is calculated once the market closes each day with the closing security prices as of that day. That is the NAV that is in effect for the following trading day.
-
Question 4 of 10
4. Question
Which of the following statement(s) is(are) true about Taxable fixed income fund?
I. Taxable fixed income funds seek to provide current income to bondholders through periodic coupon payments on the underlying bonds that are purchased by the fund.
II. In a taxable fund, these underlying bonds typically include corporate bonds, the income derived from which is taxable at the federal, state, and local levels.
III. The most common reason for Taxable fixed income funds to have higher yields is that there is greater concern about the issuing company’s ability to meet the ongoing coupon payment obligations.
IV. For investors in higher tax brackets, taxable fixed income fund can be especially attractive when compared to fully taxable corporate bonds on a tax-equivalent yield basis.Correct
Taxable fixed income funds seek to provide current income to bondholders through periodic coupon payments on the underlying bonds that are purchased by the fund. In a taxable fund, these underlying bonds typically include corporate bonds, the income derived from which is taxable at the federal, state, and local levels.
Incorrect
Taxable fixed income funds seek to provide current income to bondholders through periodic coupon payments on the underlying bonds that are purchased by the fund. In a taxable fund, these underlying bonds typically include corporate bonds, the income derived from which is taxable at the federal, state, and local levels.
-
Question 5 of 10
5. Question
Which of the following statement is true about Tax-exempt income funds?
Correct
Tax-exempt income funds seek to provide tax-exempt current income by investing in municipal bonds.
Incorrect
Tax-exempt income funds seek to provide tax-exempt current income by investing in municipal bonds.
-
Question 6 of 10
6. Question
Which of the following statement(s) is(are) true about high yield fixed income fund?
I. A high yield fixed income fund seeks to provide a high level of current income to investors by investing in fixed income securities with higher current yields.
II. In high yield fixed income fund, there is greater concern about the issuing company’s ability to meet the ongoing coupon payment obligations.
III. High yield bonds seek to provide greater current income levels to investors by investing in the fixed income securities of companies who may be at a lower risk of default.
IV. High yield bonds are appealing to investors who are seeking to earn current income but seek a higher return than that offered through traditional corporate bonds.Correct
A high yield fixed income fund seeks to provide a high level of current income to investors by investing in fixed income securities with higher current yields. The most common reason for these securities to have higher yields is that there is greater concern about the issuing company’s ability to meet the ongoing coupon payment obligations. High yield bonds seek to provide greater current income levels to investors by investing in the fixed income securities of companies who may be at a greater risk of default. High yield bonds are appealing to investors who are seeking to earn current income but seek a higher return than that offered through traditional corporate bonds. For those investors willing to accept an additional level of risk, the payoff of high yield bonds can be quite attractive.
Incorrect
A high yield fixed income fund seeks to provide a high level of current income to investors by investing in fixed income securities with higher current yields. The most common reason for these securities to have higher yields is that there is greater concern about the issuing company’s ability to meet the ongoing coupon payment obligations. High yield bonds seek to provide greater current income levels to investors by investing in the fixed income securities of companies who may be at a greater risk of default. High yield bonds are appealing to investors who are seeking to earn current income but seek a higher return than that offered through traditional corporate bonds. For those investors willing to accept an additional level of risk, the payoff of high yield bonds can be quite attractive.
-
Question 7 of 10
7. Question
Which of the following statement(s) is(are) true about mortgage backed securities fund?
I. A mortgage backed securities fund will invest in a pool of underlying mortgages, and the payments from the fund to investors represent a pass through of mortgage interest and principal repayments.
II. Mortgage backed securities can be further divided into more specific funds.
III. A mortgage backed securities fund will seek to replicate the performance of a given index by investing in a representative cross section of the funds contained in the index.
IV. The goal of the mortgage backed securities fund is to minimize costs while providing a close replication of performance, so it would be too costly to invest in each individual security contained in the index and adjust the proportions held.Correct
A mortgage backed securities fund will invest in a pool of underlying mortgages, and the payments from the fund to investors represent a pass through of mortgage interest and principal repayments. The higher credit quality of the fund, the lower the rates that will be offered. Additionally, mortgage backed securities can be further divided into more specific funds, such as agency mortgage backed securities and commercial mortgage backed securities. An index fund will seek to replicate the performance of a given index by investing in a representative cross section of the funds contained in the index. The goal of the fund is to minimize costs while providing a close replication of performance, so it would be too costly to invest in each individual security contained in the index and adjust the proportions held. For the Russell 2000, an index fund would merely seek to replicate the portfolio’s characteristics using a fraction of the underlying funds, as opposed to buying all 2000 securities.
Incorrect
A mortgage backed securities fund will invest in a pool of underlying mortgages, and the payments from the fund to investors represent a pass through of mortgage interest and principal repayments. The higher credit quality of the fund, the lower the rates that will be offered. Additionally, mortgage backed securities can be further divided into more specific funds, such as agency mortgage backed securities and commercial mortgage backed securities. An index fund will seek to replicate the performance of a given index by investing in a representative cross section of the funds contained in the index. The goal of the fund is to minimize costs while providing a close replication of performance, so it would be too costly to invest in each individual security contained in the index and adjust the proportions held. For the Russell 2000, an index fund would merely seek to replicate the portfolio’s characteristics using a fraction of the underlying funds, as opposed to buying all 2000 securities.
-
Question 8 of 10
8. Question
Which of the following statement(s) is(are) not true about an index fund?
I. An index fund will seek to replicate the performance of a given index by investing in a representative cross section of the funds contained in the index.
II. An index fund would invest in companies that are involved in the mining and exploration of precious metals.
III. The performance of an index fund is dependent not only upon the operational success of the company, but also on commodity prices for the various precious metals that they mine.
IV. The goal of the index fund is to minimize costs while providing a close replication of performance, so it would be too costly to invest in each individual security contained in the index and adjust the proportions held.Correct
An index fund will seek to replicate the performance of a given index by investing in a representative cross section of the funds contained in the index. The goal of the fund is to minimize costs while providing a close replication of performance, so it would be too costly to invest in each individual security contained in the index and adjust the proportions held.
Incorrect
An index fund will seek to replicate the performance of a given index by investing in a representative cross section of the funds contained in the index. The goal of the fund is to minimize costs while providing a close replication of performance, so it would be too costly to invest in each individual security contained in the index and adjust the proportions held.
-
Question 9 of 10
9. Question
A fund of funds is a mutual fund that –
Correct
A fund of funds is a mutual fund that seeks to provide returns to investors by investing in an array of hedge funds.
Incorrect
A fund of funds is a mutual fund that seeks to provide returns to investors by investing in an array of hedge funds.
-
Question 10 of 10
10. Question
Hedge funds are valued –
Correct
Hedge funds are valued much less frequently, often monthly, and typically require substantial minimum investments.
Incorrect