Choose wisely. There is only one correct answer to each question.
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1.
Why is it important to monitor your fund families?
Both of the above. Changes at fund families can mean changes at your fund if your manager takes on new responsibilities or is otherwise distracted from running the fund that you own.
2.
Which type of fund is least likely to be affected by a change in management?
An index fund. Index funds mimic indexes; no matter who is managing, the selection of stocks will be according to that benchmark.
3.
A funds asset growth can lead to many problems. Which of the following is not typically one of them?
Higher expenses. As assets grow, expenses may decline. But performance may stall, and the funds manager may have to change his or her strategy to accommodate all that money.
4.
A manager change at a fund is _______.
A warning sign that change may be on the way. Manager changes can lead to a drop-off in performance or a change in strategy, so theyre certainly warning signs. However, some types of funds handle manager changes better than others. As a result, a manager change isnt an automatic sell signal.
5.
If a mutual fund starts out as a small-cap fund, it may eventually become a mid-cap or large-cap fund.
