Question 1

A fund that has a sales charge of 2 to 3 percent is said to be a:

Accepted Answer

A)   back-end load fund.
B)   discount fund.
C)   front-end load fund.
D)   low load fund.E) A) and D)
F) A) and B)

Question 2

Segregated Funds are sold by insurance companies and are required by law to guarantee that at a minimum, investors will receive all of their contribution back after a stated amount of time.

Accepted Answer

A) True 
 B)False  False

Question 3

LSVCCs have all of the following characteristics except:

Accepted Answer

A)   They must be sponsored by labour organizations.
B)   Their specific mandate is to invest in small to medium-size business.
C)   Among their main purposes are to create and protect jobs.
D)   They increase the amount of angel and bridge financing in the market.E) A) and B)
F) A) and C) D

Question 4

All of the following statements about Labour Sponsored Venture Capital Corporations (LSVCCs)  are true except:
1)  Eligible investments are restricted to taxable Canadian businesses that are active in Canada.
2)  LSVCCs may be considered hybrid securities, since they are speculative investments that offer tax benefits.
3)  RRSPs holding LSVCCs are allowed to hold double the current 20% foreign content.
4)  Unlike mutual funds, LSVCCs are not restricted to 10% ownership in a given company.

Accepted Answer

A)   1 and 2
B)   1 and 3
C)   1, 2, and 4
D)   All of these statements are true.E) B) and C)
F) B) and D)

Question 5

Mutual funds that are constantly changing their capitalization as new shares are sold and outstanding shares are redeemed are also known as:

Accepted Answer

A)   unit investment trusts.
B)   closed-end investment funds.
C)   regulated investment companies.
D)   open-end investment funds.E) C) and D)
F) A) and B)

Question 6

ETFs funds tend to have lower MERs than most mutual funds.

Accepted Answer

A) True 
 B)False

Question 7

Does an investor with $5,000 to invest have a wide or narrow selection of mutual funds available?

Accepted Answer

An investor with $5,000 has a ...

Question 8

Closed-end investment companies:

Accepted Answer

A)   do not trade in a secondary market.
B)   usually sell no additional shares after the IPO.
C)   closed-end investment companies are passive investments that only index the market.
D)   are also known as ETFs.E) C) and D)
F) A) and C)

Question 9

Value funds would be more likely to buy stock based on a sound earnings record, while growth funds might invest in companies with limited or no earnings records.

Accepted Answer

A) True 
 B)False

Question 10

If the NAV is greater than the market price on a closed-end fund, the fund is selling at a premium.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an objective of a money market mutual fund?

Accepted Answer

A)   Growth
B)   Capital gains
C)   Long-term capital appreciation
D)   None of the above is an objective of a money market fund.E) None of the above
F) A) and C)

Question 12

Global funds tend to hold a higher percentage of their portfolio in domestic securities than do international funds.

Accepted Answer

A) True 
 B)False

Question 13

Would one expect to find higher P/E ratios in the shares that are purchased for an aggressive growth fund or in a growth and income fund?

Accepted Answer

One would expect higher P/Es i...

Question 14

Which of the following trade on stock exchanges?

Accepted Answer

A)   unit investment trusts
B)   closed-end investment companies
C)   open-end investment companies
D)   All trade on stock exchanges.E) A) and B)
F) A) and C)

Question 15

The most common type of payment for load fees in Canada is:

Accepted Answer

A)   front-end sales charges.
B)   back-end (redemption)  charges.
C)   giving the investor the option of front- or back-end charges.
D)   no loads.E) B) and C)
F) A) and C) C

Question 16

Which of the following is not a feature of an ETF?

Accepted Answer

A)   ETFs are priced continuously during a trading day.
B)   ETFs can only be purchased in a cash account and cannot be margined.
C)   ETFs can be sold short.
D)   Most ETFs are passively managed funds designed to mimic the performance of a market index.E) B) and C)
F) A) and B)

Question 17

For closed-ended funds:

Accepted Answer

A)   if NAV > market price, the fund is selling at a discount.
B)   if NAV 
C)   if NAV > market price, the fund is trading at a premium.
D)   Closed-ended funds cannot trade at either a premium or a discount.E) A) and D)
F) A) and C)

Question 18

Which of the following is not a reason for investing indirectly through investment funds?

Accepted Answer

A)   The investor has a small capital base and cannot properly diversify on their own.
B)   The investor does not have adequate time to manage the investment portfolio.
C)   The investor perceives a benefit to invest exclusively in the shares of one corporation.
D)   The investor does not wish to manage their own portfolio.E) C) and D)
F) A) and C)

Question 19

Which of the following statements regarding investment company prices is not true?

Accepted Answer

A)   The effective price for open-end investment companies is the NAV.
B)   Open-end shares often sell at discounts from their actual per-share value.
C)   Closed-end shares may sell at discounts from their actual per-share value.
D)   All of these statements are true.E) B) and C)
F) A) and D)

Question 20

In addition to load fees, a mutual fund investor may also have to pay:

Accepted Answer

A)   NAV.
B)   NAVPS.
C)   MER.
D)   EFT.E) A) and C)
F) C) and D)

Exam 3: Investment Funds

A fund that has a sales charge of 2 to 3 percent is said to be a:

Correct Answer
verified

Segregated Funds are sold by insurance companies and are required by law to guarantee that at a minimum, investors will receive all of their contribution back after a stated amount of time.

Correct Answer
verified
False

LSVCCs have all of the following characteristics except:

Correct Answer
verified
D

Correct Answer
verified

Mutual funds that are constantly changing their capitalization as new shares are sold and outstanding shares are redeemed are also known as:

Correct Answer
verified

ETFs funds tend to have lower MERs than most mutual funds.

Correct Answer
verified

Does an investor with $5,000 to invest have a wide or narrow selection of mutual funds available?

Correct Answer
verified
An investor with $5,000 has a ...
View Answer

Closed-end investment companies:

Correct Answer
verified

Value funds would be more likely to buy stock based on a sound earnings record, while growth funds might invest in companies with limited or no earnings records.

Correct Answer
verified

If the NAV is greater than the market price on a closed-end fund, the fund is selling at a premium.

Correct Answer
verified

Which of the following is an objective of a money market mutual fund?

Correct Answer
verified

Global funds tend to hold a higher percentage of their portfolio in domestic securities than do international funds.

Correct Answer
verified

Would one expect to find higher P/E ratios in the shares that are purchased for an aggressive growth fund or in a growth and income fund?

Correct Answer
verified
One would expect higher P/Es i...
View Answer

Which of the following trade on stock exchanges?

Correct Answer
verified

The most common type of payment for load fees in Canada is:

Correct Answer
verified
C

Which of the following is not a feature of an ETF?

Correct Answer
verified

For closed-ended funds:

Correct Answer
verified

Which of the following is not a reason for investing indirectly through investment funds?

Correct Answer
verified

Which of the following statements regarding investment company prices is not true?

Correct Answer
verified

In addition to load fees, a mutual fund investor may also have to pay:

Correct Answer
verified

Exam 3: Investment Funds

A fund that has a sales charge of 2 to 3 percent is said to be a:

Correct AnswerverifiedShow Answer

Segregated Funds are sold by insurance companies and are required by law to guarantee that at a minimum, investors will receive all of their contribution back after a stated amount of time.

Correct AnswerverifiedFalse

LSVCCs have all of the following characteristics except:

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

Mutual funds that are constantly changing their capitalization as new shares are sold and outstanding shares are redeemed are also known as:

Correct AnswerverifiedShow Answer

ETFs funds tend to have lower MERs than most mutual funds.

Correct AnswerverifiedShow Answer

Does an investor with $5,000 to invest have a wide or narrow selection of mutual funds available?

Correct AnswerverifiedAn investor with $5,000 has a ...View AnswerShow Answer

Closed-end investment companies:

Correct AnswerverifiedShow Answer

Value funds would be more likely to buy stock based on a sound earnings record, while growth funds might invest in companies with limited or no earnings records.

Correct AnswerverifiedShow Answer

If the NAV is greater than the market price on a closed-end fund, the fund is selling at a premium.

Correct AnswerverifiedShow Answer

Which of the following is an objective of a money market mutual fund?

Correct AnswerverifiedShow Answer

Global funds tend to hold a higher percentage of their portfolio in domestic securities than do international funds.

Correct AnswerverifiedShow Answer

Would one expect to find higher P/E ratios in the shares that are purchased for an aggressive growth fund or in a growth and income fund?

Correct AnswerverifiedOne would expect higher P/Es i...View AnswerShow Answer

Which of the following trade on stock exchanges?

Correct AnswerverifiedShow Answer

The most common type of payment for load fees in Canada is:

Correct AnswerverifiedC

Which of the following is not a feature of an ETF?

Correct AnswerverifiedShow Answer

For closed-ended funds:

Correct AnswerverifiedShow Answer

Which of the following is not a reason for investing indirectly through investment funds?

Correct AnswerverifiedShow Answer

Which of the following statements regarding investment company prices is not true?

Correct AnswerverifiedShow Answer

In addition to load fees, a mutual fund investor may also have to pay:

Correct AnswerverifiedShow Answer

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False

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D

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An investor with $5,000 has a ...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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One would expect higher P/Es i...
View Answer

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C

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