#1
Which of the following is a characteristic of mutual funds?
High liquidity
ExplanationEasy conversion to cash.
#2
What does NAV stand for in the context of mutual funds?
Net Asset Value
ExplanationCurrent value per share of a mutual fund.
#3
Which of the following statements about mutual funds is true?
Mutual funds pool money from multiple investors to invest in securities.
ExplanationCollective investment scheme.
#4
What is the primary objective of an income fund?
To generate a steady stream of income for investors
ExplanationEmphasizes regular income distribution.
#5
Which type of mutual fund tends to have the least volatility?
Money market funds
ExplanationInvests in short-term, low-risk securities.
#6
What is the primary advantage of investing in ETFs over mutual funds?
Lower expense ratios
ExplanationReduced costs for investors.
#7
What is the primary function of a hedge fund?
To maximize capital gains
ExplanationSeeking high returns through various strategies.
#8
Which of the following investment vehicles typically offers the highest potential returns but also carries the highest risk?
Options contracts
ExplanationHighly speculative financial instruments.
#9
Which investment vehicle typically tracks a specific market index?
ETF
ExplanationPassively managed fund mirroring an index.