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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
The mutual fund advisor may play additional roles besides that of advisor.
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True. It may also be the transfer agent.
2.
The mutual fund prospectus explains the risk of the mutual fund.
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False. It explains the risks of the types of securities it holds, but it does not cover risks of the fund itself.
3.
An objective may include a statement of the level of share-price stability it seeks.
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True. Stability is often a strategy for achieving an objective.
4.
To promote a mutual fund, a prospectus could legally include information about why you should invest in the fund.
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False. Prospectuses are forbidden to make any sales recommendations.
5.
A mutual fund shareholder manual does all of the following except explain how _______.
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Taxes apply. The shareholder manual explains share price, redemption, and adding to your account.
6.
Transaction fees cover buying and selling costs of securities within a mutual fund.
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True. Transacting is essentially buying and selling portfolio securities.