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1.
The mutual fund advisor may play additional roles besides that of advisor.
True. It may also be the transfer agent.
2.
Mutual funds will require a minimum purchase amount; however, that minimum can be waived.
True. Some mutual funds will waive the minimum required investment amount for a number of different reasons, such as setting up an automatic investment plan with them. Refer to the fund's prospectus for additional details on such waivers.
3.
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.
4.
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.
5.
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.