Test your knowledge

Choose wisely. There is only one correct answer to each question.

Keep studying!

Get a certificate for this quiz
Enter your name and email address below to receive certificate for this course. You will need this to confirm you have completed it.

Review your answers below to learn more.

What do bank-loan funds invest in?

Choose wisely. There is only one correct answer.

Bank loans taken on by corporations

Loans taken out by individuals

Government loans

Stocks

Bank loans taken on by corporations. The funds choose floating-rate bank loans.

Certificates of deposit are not insured.

Choose wisely. There is only one correct answer.

True

False

False. Certificates of deposit are insured.

How do ultrashort-bond funds limit risk?

Choose wisely. There is only one correct answer.

They all invest in short-term securities, typically with durations of six months or less.

They only invest in high-quality credits.

Theyre insured.

They all invest in short-term securities, typically with durations of six months or less. Not all ultrashort-bond funds stick exclusively with high-quality securities. And they are not insured.

For many, a disadvantage of certificates of deposit is that _______.

Choose wisely. There is only one correct answer.

You must hold them for a set period

They are insured

Their returns are unpredictable

You must hold them for a set period. There are early-withdrawal penalties if you take your money out early.

Bank-loan funds have very little interest-rate risk to worry about.

Choose wisely. There is only one correct answer.

True

False

True. Because they invest in floating-rate loans, bank-loan funds have very little interest-rate risk.

© Copyright 2024 Morningstar, Inc. All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. In addition, we encourage you to read this important disclosure.