Choose wisely. There is only one correct answer to each question.
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1.
If you buy mutual fund shares from another investor instead of from the fund itself, you are buying _______ shares.
Closed-end. Closed-end fund shares are traded between investors and cannot be bought from the fund itself, except when it sells shares for the very first time.
2.
Which party hands out dividends to mutual fund investors?
The transfer agent. If you chose "distributor," remember that this party distributes shares, not dividends.
3.
Which of the following does diversification do for a mutual fund?
Spread risk. By spreading risk among several items in a fund, you can reduce the damage that a downturn in a few of them can cause.
4.
In the world of mutual funds, what are outstanding shares?
Shares owned by the public. To be "outstanding" is to be in the public's possession.
5.
When a mutual funds individual holdings make money, so do the mutual funds shareholders.
True. Earnings are passed from the holdings to the funds shareholders.
