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Ch 19 - Mutual Funds, Real Estate, and Other
Choices
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1.
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All mutual funds specialize in rather conservative investments such as bonds or
money market securities.
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2.
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Mutual fund investors share in any profits made by the mutual fund.
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3.
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The primary advantage of investing in mutual funds is the ability to sell your
shares without risk of loss.
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4.
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Investors in growth funds earn their return through capital gains rather than
through dividends
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5.
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A growth and income fund invests only in stocks.
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6.
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A global fund is a mutual fund that invests in safe, liquid securities such as
Treasury bills and bonds that mature in less than one year.
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7.
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Mutual funds make money by charging fees to their customers for the professional
services provided.
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8.
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Unlike stocks, mutual fund prices are not determined by what people are willing
to pay for them.
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9.
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Real estate is one of most liquid investments you can make.
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10.
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Vacant land is usually considered a speculative investment.
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11.
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Because the property is not owner-occupied, an investor may find banks reluctant
to grant a mortgage to buy a house as rental property.
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12.
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Ownership interest in a piece of property is called equity.
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13.
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A property manager lives at the rental site, takes care of all repairs and
maintenance, and collects the rent for the owner.
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14.
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Precious metals, gems, and collectibles are considered low-risk investments that
can offset the risk of owning stocks and bonds
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15.
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The buyer of a futures contract is obligated to purchase stock or a commodity
for a specified price on a specified future date.
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16.
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A professionally managed group of investments bought using a pool of money from
many investors is called a
a. | Ponzi scheme | c. | savings bond | b. | mutual fund | d. | passbook
account |
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17.
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Advantages of investing in mutual funds include all of the following
except
a. | professional management | c. | a guaranteed rate of
return | b. | diversification | d. | liquidity |
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18.
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Which of the following is the most risky investment?
a. | income fund | c. | money market fund | b. | growth fund | d. | growth and income
fund |
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19.
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What is the goal of an income fund?
a. | to earn returns from capital gains alone | b. | to earn returns from
both dividends and capital gains | c. | to produce current income from interest
alone | d. | to produce current income in the form of interest or
dividends |
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20.
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Which of the following tells you the market price for a share of a mutual
fund?
a. | par value | c. | face value | b. | net asset value | d. | market value |
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21.
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Which of the following is a sales charge paid when you sell an
investment?
a. | front-end load | c. | dividend | b. | back-end load | d. | capital gain |
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22.
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To reduce risk, you should choose a mutual fund company with all of the
following characteristics except
a. | it is a large company that manages investments for millions of
investors | b. | it provides customers with easy-to-read statements | c. | it exists both in
brick-and-mortar and in cyberspace | d. | it has been in business for a minimum of five
years |
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23.
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A building with two separate living quarters is called a
a. | duplex | c. | quad | b. | triplex | d. | condo |
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24.
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An investment in a pool of mortgages that have been purchased by a government
agency is a
a. | real estate investment trust | c. | real estate
syndicate | b. | certificate of participation | d. | derivative
mortgage |
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25.
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Farm products (such as wheat, corn, and cattle) and metals (such as gold and
silver) are called
a. | futures | c. | commodities | b. | options | d. | collectibles |
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Ch 19 Mutual Funds, Real Estate, and Other
Choices
a. | balanced | f. | Commercial | b. | Capital | g. | growth | c. | real
estate | h. | load | d. | prospectus | i. | depreciation | e. | mortgage | j. | global |
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26.
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__________ gains come from the profits made when mutual fund managers sell some
of the fund’s securities for more than they paid for them.
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27.
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A mutual fund whose investment goal is to buy stocks that will increase in
value over time is a(n) __________ fund.
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28.
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A(n) __________ fund is a mutual fund that seeks both growth and income but
invests in a mixture of stocks and bonds rather than in stocks alone.
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29.
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A(n) __________ fund is a mutual fund that purchases international stocks and
bonds as well as U.S. securities.
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30.
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The __________ is a legal document provided by a mutual fund company that
offers securities or mutual funds for sale.
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31.
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If you buy a mutual fund through a broker, you will likely need to pay a sales
fee, called a(n) __________.
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32.
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When you invest in __________, you are buying land and any buildings on
it.
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33.
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__________ property is land and buildings that produce lease or rental
income.
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34.
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A loan to purchase real estate is called a(n) __________ or trust deed.
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35.
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A decline in the value of property due to normal wear and tear is called
__________.
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