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Funds 502: Fund Warning Signs

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1.
A funds performance can be affected when new funds are added to the family it belongs to.
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True. Sometimes, a fund will lose its focus or change its role within the fund.
2.
As a mutual fund family grows, its funds will continue to perform their original roles.
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False. Sometimes a fund changes its focus, for example from small-cap to mid-cap.
3.
Which type of fund is least likely to be affected by a change in management?
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An index fund. Index funds mimic indexes; no matter who is managing, the selection of stocks will be according to that benchmark.
4.
A funds asset growth can lead to many changes. Which of the following is often one of them?
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All of the above. All of these are possible effects of asset growth.
5.
Which government source provides you with information on funds?
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Securities and Exchange Commission. The Securities and Exchange Commission provides the EDGAR database of information on funds.