#1
What is a mutual fund?
A pooled investment vehicle managed by professionals
ExplanationProfessionally managed pooled investment.
#2
Which of the following is NOT a type of mutual fund?
Cryptocurrency mutual fund
ExplanationNon-existent mutual fund type.
#3
What is the role of a mutual fund manager?
To manage the fund's investments according to its objectives
ExplanationOverseeing fund's investment decisions.
#4
What is the minimum investment required to start investing in most mutual funds?
$100
ExplanationCommon minimum investment amount.
#5
What is the primary advantage of mutual funds over individual stock picking?
Diversification
ExplanationReduced risk through spreading investments.
#6
What is the NAV of a mutual fund?
Net Asset Value
ExplanationValue of each share in the mutual fund.
#7
What does 'expense ratio' in a mutual fund refer to?
The fees charged by the mutual fund company for managing the fund
ExplanationCost of managing the fund.
#8
What does 'load' in a mutual fund refer to?
The fees charged when buying or selling shares of the fund
ExplanationBuying or selling fees.
#9
What is the primary goal of a growth mutual fund?
To maximize capital appreciation
ExplanationEmphasizes increasing value of investments.
#10
What is a 'prospectus' in relation to mutual funds?
A document outlining the fund's objectives, strategies, and risks
ExplanationFund's informational document.
#11
Which of the following is a potential benefit of investing in mutual funds?
Professional management of investments
ExplanationAccess to professional investment management.
#12
What is the concept of 'dollar-cost averaging' in mutual fund investing?
Investing a fixed amount of money at regular intervals, regardless of market conditions
ExplanationConsistent investment strategy.
#13
What is a 'front-end load' in mutual fund terms?
A fee charged when buying shares of the fund
ExplanationFee at the time of purchase.
#14
What is the term used to describe the process of selling all of the holdings in a mutual fund?
Liquidation
ExplanationSelling all investments.
#15
What is the primary goal of a sector mutual fund?
To invest in a specific industry or sector of the economy
ExplanationFocused investment in particular sectors.