Question 1

Redeeming your back-end load mutual fund shares might result in a charge called the:

Accepted Answer

A)  redemption fee.
B)  usage fee.
C)  management fee.
D)  recordkeeping fee.
E)  12b-1 fee.

Question 2

In the online quotes from The Wall Street Journal 's listing of mutual funds, an "r" after the mutual fund name means that particular mutual fund has a _____ associated with it.

Accepted Answer

A)  front-end load
B)  back-end load
C)  12b-1 fee
D)  management fee
E)  distribution load

Question 3

Investment in real estate is attractive to investors because:

Accepted Answer

A)  it is a highly liquid investment.
B)  it permits a high degree of financial leverage.
C)  it is exempted from taxation.
D)  it requires very low investment.
E)  it is highly correlated with the stock markets.

Question 4

Carlos holds a portfolio of stocks and bonds. He is planning to buy a real estate property worth $150,000. He can use financial leverage to make this purchase by:

Accepted Answer

A)  paying $75,000 cash in the first installment and selling shares worth $75,000 from his portfolio to pay the second installment.
B)  taking a personal loan worth $100,000 and selling bonds worth $50,000 from his portfolio.
C)  selling bonds from his portfolio worth $80,000 and writing a check for $70,000.
D)  selling stocks from his portfolio worth $50,000 and paying $100,000 in cash.
E)  paying $150,000 in cash from his savings account.

Question 5

Mutual funds and exchange traded funds (ETFs)provide professional investment management.

Accepted Answer

A) True 
 B)False

Question 6

Mutual funds typically offer more diversification and less risk than purchasing one or two individual securities.

Accepted Answer

A) True 
 B)False

Question 7

_____ funds are highly speculative investments that seek large profits from capital gains.

Accepted Answer

A)  Balanced
B)  Growth
C)  Equity income
D)  Aggressive growth
E)  Exchange traded D

Question 8

_____ funds are balanced funds that automatically change the asset allocation from more to less equity exposure as an investor ages.

Accepted Answer

A)  Bond
B)  Aggressive growth
C)  Value
D)  Target-date
E)  Intermediate-term

Question 9

An investor with a small amount of money should stick to using load funds instead of no-load funds.

Accepted Answer

A) True 
 B)False  False

Question 10

A real estate investment trust that invests in various types of income-producing properties and mortgage loans is a:

Accepted Answer

A)  hybrid REIT.
B)  blind pool REIT.
C)  real estate REIT.
D)  hybrid limited REIT.
E)  mortgage REIT.

Question 11

The actual ownership of a mutual fund is in the hands of the:

Accepted Answer

A)  management company.
B)  custodians.
C)  shareholders.
D)  distributors.
E)  money manager.

Question 12

A(n) _____ oversees a mutual fund's portfolio and makes the buy and sell decisions.

Accepted Answer

A)  transfer agent
B)  distributor
C)  investment advisor
D)  regulator
E)  custodian

Question 13

Tom takes a loan of $60,000 at 4% annual interest to purchase a property worth $100,000. He earns an annual income of $10,000 after expenses but before interest and income taxes are deducted. If the income tax rate is 30%, then the leveraged return on the real estate investment is:

Accepted Answer

A)  30%.
B)  25%.
C)  10%.
D)  19%.
E)  13%.

Question 14

All mutual funds always charge a:

Accepted Answer

A)  transaction fee.
B)  12b-1 fee.
C)  management fee.
D)  fee on the sale of the shares.
E)  redemption fee. C

Question 15

The idea of a mutual fund is based on the idea of pooled diversification.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following real estate investment trusts (REITs) is the most attractive to income-oriented investors?

Accepted Answer

A)  Equity
B)  Mortgage
C)  Back-end load
D)  Unit trust
E)  Exchange traded

Question 17

Which of the following statements regarding real estate investments is true?

Accepted Answer

A)  Real estate investments move in tandem with stocks.
B)  Adding  real estate to your stock portfolio increases investment diversity.
C)  Real estate is an asset with high liquidity.
D)  Real estate investments have less scope for financial leverage.
E)  Real estate investments cannot depreciate.

Question 18

If you are a mutual fund investor who needs a steady income, you might take advantage of a fund's:

Accepted Answer

A)  retirement plans.
B)  exchange privileges.
C)  automatic reinvestment plans.
D)  systematic withdrawal plans.
E)  conversion plans.

Question 19

A fund that is structured to match the performance of a certain market segment is known as a(n) _____ fund.

Accepted Answer

A)  balanced
B)  preferred stock
C)  exchange traded
D)  index
E)  capital

Question 20

A fund that invests in only one or more industries that are associated with each other is a _____ fund.

Accepted Answer

A)  money market
B)  maximum capital
C)  sector
D)  balanced
E)  bond

Exam 13: Investing in Mutual Funds, Etfs, and Real Estate

Redeeming your back-end load mutual fund shares might result in a charge called the:

Correct AnswerverifiedShow Answer

In the online quotes from The Wall Street Journal 's listing of mutual funds, an "r" after the mutual fund name means that particular mutual fund has a _____ associated with it.

Correct AnswerverifiedShow Answer

Investment in real estate is attractive to investors because:

Correct AnswerverifiedShow Answer

Carlos holds a portfolio of stocks and bonds. He is planning to buy a real estate property worth $150,000. He can use financial leverage to make this purchase by:

Correct AnswerverifiedShow Answer

Mutual funds and exchange traded funds (ETFs)provide professional investment management.

Correct AnswerverifiedShow Answer

Mutual funds typically offer more diversification and less risk than purchasing one or two individual securities.

Correct AnswerverifiedShow Answer

_____ funds are highly speculative investments that seek large profits from capital gains.

Correct AnswerverifiedD

_____ funds are balanced funds that automatically change the asset allocation from more to less equity exposure as an investor ages.

Correct AnswerverifiedShow Answer

An investor with a small amount of money should stick to using load funds instead of no-load funds.

Correct AnswerverifiedFalse

A real estate investment trust that invests in various types of income-producing properties and mortgage loans is a:

Correct AnswerverifiedShow Answer

The actual ownership of a mutual fund is in the hands of the:

Correct AnswerverifiedShow Answer

A(n) _____ oversees a mutual fund's portfolio and makes the buy and sell decisions.

Correct AnswerverifiedShow Answer

Tom takes a loan of $60,000 at 4% annual interest to purchase a property worth $100,000. He earns an annual income of $10,000 after expenses but before interest and income taxes are deducted. If the income tax rate is 30%, then the leveraged return on the real estate investment is:

Correct AnswerverifiedShow Answer

All mutual funds always charge a:

Correct AnswerverifiedC

The idea of a mutual fund is based on the idea of pooled diversification.

Correct AnswerverifiedShow Answer

Which of the following real estate investment trusts (REITs) is the most attractive to income-oriented investors?

Correct AnswerverifiedShow Answer

Which of the following statements regarding real estate investments is true?

Correct AnswerverifiedShow Answer

If you are a mutual fund investor who needs a steady income, you might take advantage of a fund's:

Correct AnswerverifiedShow Answer

A fund that is structured to match the performance of a certain market segment is known as a(n) _____ fund.

Correct AnswerverifiedShow Answer

A fund that invests in only one or more industries that are associated with each other is a _____ fund.

Correct AnswerverifiedShow Answer

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D

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False

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C

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