Test Bank For Investments Global Edition Zvi Bodie 10th Edition

Test Bank For Investments Global Edition Zvi Bodie 10th Edition

Mutual Funds and Other Investment Companies

Multiple Choice Questions
1.

Which one of the following statements regarding open-end mutual funds is false?
A. The funds redeem shares at net asset value.

B. The funds offer investors professional management.

C. The funds offer investors a guaranteed rate of return.

D. The funds offer investors professional management and a guaranteed rate of return.

E. The funds redeem shares at net asset value and offer investors professional management.

2.

Which one of the following statements regarding closed-end mutual funds is false?
A. The funds always trade at a discount from NAV.

B. The funds redeem shares at their net asset value.

C. The funds offer investors professional management.

D. The funds always trade at a discount from NAV and redeem shares at their net asset value.

E. None of the options

3.

Which of the following functions do investment companies perform for their investors?
A. Record keeping and administration

B. Diversification and divisibility

C. Professional management

D. Lower transaction costs

E. All of the options

4.

Multiple Mutual Funds had year-end assets of $457,000,000 and liabilities of $17,000,000. There were 24,300,000 shares in the fund at year-end. What was Multiple Mutual’s net asset value?
A. $18.11

B. $18.81

C. $69.96

D. $7.00

E. $181.07

5.

Growth Fund had year-end assets of $862,000,000 and liabilities of $12,000,000. There were 32,675,254 shares in the fund at year-end. What was Growth Fund’s net asset value?
A. $28.17

B. $25.24

C. $19.62

D. $26.01

E. $21.56