Answer Happy

1. Apply What You've Learned - Investing Through Mutual Funds Scenario: You are 30 years old and single. You have a moderate risk investment philosophy. You are interested in long-term investing, but you do not have sufficient funds to buy a variety of investments to be fully diversified and you do not feel you have the expertise to make good choices. Read the statements and indicate whether each statement is true or false. Statement False True By definition, a mutual fund is a diversified portfolio designed to achieve the goals of income, growth, or both. O O An important advantage of a mutual fund investment is that the large required minimum deposit separates the small casual investor from you, the large, serious investor. A mutual fund investor can choose either to receive current income payments or to have the income automatically reinvested in the fund. O о The most frequently encountered type of mutual fund is the open-end fund. о Given your moderate risk investment philosophy, you would be best served by investing in a mutual fund with: O a growth objective. an income objective. O both a growth and an income objective.
Rank the following three types of funds from lowest to highest levels of risk and return. Use a 1 to denote the lowest level of risk/return and 3 to indicate the highest levels. Risk level Type of mutual fund Intermediate government bond funds Growth funds 1447 Emerging market funds Among the features that facilitate making investments in a mutual fund are: Check all that apply. As your objectives change, you can easily swap shares for another mutual fund within a mutual fund family. A systematic withdrawal plan O A check-writing feature Any interest, dividends, and capital gains can be automatically reinvested. . The best mutual funds in which to invest are usually O back-end load funds no-load funds front-end load funds - A $3,000 investment in a mutual fund with a 3% front-end load will allow you to make a net investment of You should review and rebalance your mutual fund investment annually The FINRA's website may be used to do all of the following except O look up available discounts on a large number of funds O purchase low-cost mutual fund shares O analyze the impact of fees and expenses on your investment O look up and compare applicable fees for thousands of funds You have decided to invest in an open-end mutual fund. You are currently looking at a fund-Washington Premier Fund-in your newspaper. The fund is quoted as: Name YTD %RET NAV 36.25 Net Chg 0.15 WashPren 6.95 Assume that today's opening price of Washington Premier Fund equals yesterday's closing price. If you wanted to make your investment first thing this morning, then you should expect to pay for each share of Wash Pre since it Yesterday, each share of Wash Pre sold for , than it did the day before, and offers a return of a for the year. If you had $8,000 available to invest, you could purchase shares of Wash Pre. Your evaluation of the Washington Premier Fund is made easier by the fact that: O your investment choices are limited. O mutual funds are careful to explicitly state their investment objectives. O a mutual fund broker will select a customized mix for you. a .