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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
Which of the following is an operating expense in a mutual fund?
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12b-1 fee. Taxes are not operating expenses, and the other two are transaction fees.
2.
What does the section on the fund's objectives tell the investor?
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All of the above. The "Objectives" section includes strategies, philosophy, and objectives.
3.
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.
4.
The mutual fund shareholder manual explains how to open a mutual fund account.
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True. That is one of its most basic services.
5.
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.
6.
Which of the following pieces of information on portfolio managers is included in a mutual fund prospectus?
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Employment history. This provides a sense of the managers' experience.