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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
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.
2.
Which of the following is not covered under a prospectus' section on performance?
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Risks. The "Performance" section deals with objective data.
3.
A mutual fund prospectus does all of the following except _______.
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Make recommendations. Prospectuses are forbidden to advertise a fund.
4.
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.
5.
Which of the following is not a transaction fee?
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Management fee. This fee is an operating expense. It is not related to trading.
6.
Which party hands out dividends to mutual fund investors?
Choose wisely. There is only one correct answer.
The transfer agent. If you chose "distributor," remember that this party distributes shares, not dividends.