Choose wisely. There is only one correct answer to each question.
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1.
Buying mutual funds from a single, large fund family will always provide you a diverse range of offerings to choose from.
False. Some families, despite being large, specialize in a narrow range of funds.
2.
With no-transaction fee networks, a mutual fund investor pays for the service _______.
Indirectly. Since these networks charge mutual funds to participate in them, the funds pass their cost along to investors through the expense ratio.
3.
When you buy a load fund through an advisor, where does the load that you pay go?
To your advisor. Loads are commissions that are paid to advisors. Fund managers receive a portion of the fund's management fee.
4.
If you use an advisor to buy mutual fund shares for you, he or she will be paid a commission by investing your money in _______.
Load funds. Load funds come with a sales charge that compensates the advisor for his or her work.
5.
Investing with one of the more diverse fund families or a fund supermarket _______.
Limits your paperwork. Investing all in one place makes recordkeeping easier and makes moving to and from funds a snap, too. And as long as you stick with one of the largest fund families, you'll have plenty of diversification options, too.
